(Bloomberg) -- Carvana Co. was accused by prominent short-seller Hindenburg Research of impropriety in a report alleging that the auto retailer’s su

Hindenburg Shorts Carvana, Alleging ‘Grift for the Ages’

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2025-01-03 02:00:05

(Bloomberg) -- Carvana Co. was accused by prominent short-seller Hindenburg Research of impropriety in a report alleging that the auto retailer’s subprime loan portfolio carries substantial risk and its growth is unsustainable.

Hindenburg took a short position on Carvana’s stock after conducting research that included interviewing former employees. The report, titled: “Carvana: A Father-Son Accounting Grift for the Ages,” makes several claims, including that Carvana has lax underwriting standards and uses a company owned by the father of Chief Executive Officer Ernest Garcia III to boost results.

Carvana’s shares declined 1.9% at the close in New York. The stock surged 284% last year as improving results increased optimism that the company was on the right track after worries about its debt load and losses.

“The arguments in today’s report are intentionally misleading and inaccurate and have already been made numerous times by other short sellers seeking to benefit from a decline in our stock price,” a company spokeswoman said in an email. Since its initial public offering seven years ago, Carvana has been one of the most heavily researched public companies, she said.