Carvana Stock Slips as Short-Seller Calls Its 2024 Turnaround a ‘Mirage’ | Global News Avenue

Carvana Stock (Vascular Neural Network Analyzer) fell to short selling Hindenburg Research disclosed a short position in the online used car retailer.

Carvana stock could nearly quadruple in value in 2024 on growing demand for used cars – the latest Bankruptcy Concerns in previous years had hurt the company’s stock price, but Hindenburg called the success a “mirage.”

The company on Thursday accused Carvana of selling out its customers car loan to third parties “primarily in the areas of risky subprime and deep subprime mortgages.” Hindenburg claims to have discovered the sale of $800 million in loans to unidentified “related third parties,” saying nearly 26% of the company gross profit The past nine months were due to such loan sales.

Kavanagh disputed the findings.

“The arguments in today’s report are intentionally misleading and have been made numerous times by other short sellers seeking to profit from the decline in our stock price,” a Carvana spokesperson said in an emailed statement. “We plan to continue to focus on Execute our plans to achieve greater success in 2025.”

In October, Carvana announced its third-quarter financial results Earnings per share (EPS) almost three times expected Analysts surveyed by Visible Alpha also raised their full-year forecasts. Analysts on average are also bullish: The consensus price target of about $255 represents a premium of about 28% to Carvana’s Thursday closing price of just under $200.

Hindenburg also took aim insiders Profit from surges in company share prices, including CEO Ernie Garcia III’s father, Ernest Garcia II. Hindenburg said the elder Garcia sold $3.6 billion in stock between August 2020 and August 2021 before the stock price hit lows in 2022 and 2023, with additional sales over the past year as the stock recovered. 1.4 billion US dollars.

Carvana shares closed down nearly 2% on Thursday.

Update: This article has been updated to include comments from Carvana.