Hindenburg Accuses Carvana of Accounting Manipulation, Stock Declines

The short seller's report alleges undisclosed related-party transactions and lax loan underwriting, claims Carvana denies as misleading.

Hindenburg Research has accused Carvana of inflating income through $800 million in loan sales to a suspected related party, which the company denies.
The report alleges lax underwriting practices, including high approval rates for subprime loans, and claims insiders have sold billions in stock during its recent stock surge.
Carvana's stock price fell nearly 5% before recovering slightly, following the release of the report, which labeled the company's turnaround a 'mirage.'
JP Morgan analysts defended Carvana, maintaining an 'overweight' rating and stating their research found no red flags but called for greater disclosure on loan sales.
Carvana has faced scrutiny over its financial practices, with ongoing SEC investigations and past lawsuits accusing the company of misleading investors.