Shares of Carvana Co. fell 11% on Friday after activist short seller Hindenburg Research published a report accusing the Tempe-based used car retailer of lax car loan underwriting practices, insider trading and accounting manipulation to artificially inflate its bottom line.
Hindenburg Research on Thursday published the report, entitled “Carvana: A Father-Son Accounting Grift for the Ages,” which the investment research firm says it compiled from extensive research and 49 interviews with former Carvana employees, competitors and industry experts over a four-month period.
The firm, which acknowledged it has a short position in Carvana, described the car retailer's financial turnaround [bizjournals.com] from the verge of bankruptcy in 2022 [bizjournals.com] as "a mirage."
In a statement to the Business Journal, Carvana refuted the claims in Hindenburg's report.
