Short seller Hindenburg Research has accused Carvana of engaging in accounting manipulation and insider trading, alleging that the company used shady tactics to create a false impression of financial health. Carvana's stock price dropped following the report, which came after extensive document review and interviews with industry experts.
Short seller Hindenburg Research on Thursday accused Carvana of a running an “accounting grift for the ages” in awhose report on companies run by Indian billionaire Gautam Adani led to a federal indictment of the mogul last year
Carvana shares dropped nearly 5% before paring the losses by the closing bell to close at 199.41, down 2%. The company, which once faced bankruptcy, topped analysts’ estimates for third-quarter revenue when it last reported in October. The company went on an expansion-spree during the pandemic to capitalize on a shortage of new vehicles at that time, but struggled to sell units at enough profit.When shares surged 42% last year, the chief executive’s father sold an additional $1.4 billion in Carvana stock, the report added.
Carvana went public in 2017 after it spun off from DriveTime, which was previously Ugly Duckling, a bankrupt car-rental business run by Garcia II. He took the company private and renamed it in 2002.
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Hindenburg Research accuses Carvana of accounting manipulation and loan fraudHindenburg Research alleges that Carvana's recent turnaround is a mirage propped up by unstable loans and accounting manipulation. The report highlights Carvana's practice of loan sales and the business relationship between CEO Ernie Garcia III and his father, Ernest Garcia II, who is Carvana's largest shareholder. Hindenburg claims to have uncovered $800 million in loan sales to a suspected undisclosed related party and alleges that accounting manipulation and lax underwriting have fueled temporary income growth.
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Hindenburg Research Exposes Alleged Accounting Manipulations and Conflicts of Interest at CarvanaHindenburg Research accuses Carvana of using accounting manipulation and unstable loans to create a false impression of financial health. The report highlights concerns about the company's relationship with its loan servicer, DriveTime, which is run by Carvana's CEO's father.
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Hindenburg Research Exposes Alleged Accounting Manipulation and Unstable Loans at CarvanaHindenburg Research accused Carvana of using accounting manipulation and unstable loans to create a 'mirage' of financial improvement. The report highlighted Carvana's loan sales practices and the close business relationship between CEO Ernie Garcia III and his father, Ernest Garcia II, the company's largest shareholder. Hindenburg alleged $800 million in loan sales to a suspected undisclosed related party, lax underwriting, and an increase in borrower extensions potentially masking higher delinquencies. Carvana declined to comment on the allegations, which remain unverified by CNBC.
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Hindenburg Accuses Carvana of Accounting Manipulation and Loan FraudHindenburg Research alleges that Carvana's recent turnaround is a mirage fueled by unstable loans, accounting manipulation, and a cozy relationship between CEO Ernie Garcia III and his father, Ernest Garcia II, the company's largest shareholder. The report claims Carvana engaged in $800 million in suspicious loan sales and manipulated accounting to inflate reported income.
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Hindenburg Accuses Carvana of Accounting Fraud and Insider ProfitsHindenburg Research alleges that Carvana is using accounting manipulation and unstable loans to create a false impression of financial health. The report focuses on Carvana's loan sales practices and the close relationship between CEO Ernie Garcia III and his father, Ernest Garcia II, the company's largest shareholder. Hindenburg claims Carvana is avoiding reporting higher delinquencies by granting loan extensions.
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