Carvana Stock Drops as Hindenburg Research Questions Turnaround
Shares of Carvana Co. took a bit of a tumble, dropping 11% on Friday. Why, you ask? Well, it seems that Hindenburg Research, an activist short seller, published a report that’s accusing the Tempe-based used car retailer of some pretty serious stuff. We’re talking lax car loan underwriting practices, insider trading, and accounting manipulation—the kind of things that can make a stock take a dip.
Hindenburg Research’s report, titled “Carvana: A Father-Son Accounting Grift for the Ages,” claims to have dug deep into the company. They say they spent months doing their homework and even interviewed 49 people, including former Carvana employees, competitors, and industry experts to get the scoop.
The research firm, who admits they’ve bet against Carvana’s stock, didn’t mince words when they called the company’s financial turnaround a “mirage.” Ouch.
Of course, Carvana isn’t taking these claims lying down. They’ve refuted the accusations in Hindenburg’s report. It’ll be interesting to see how this all plays out in the days to come, that’s for sure.
