New York, Jan 29, 2026, 09:58 (ET) — Regular session underway.
- Carvana shares jumped roughly 8% on Thursday, rebounding from a steep decline the previous day
- Gotham City Research claimed Carvana overstated earnings by more than $1 billion due to related-party transactions; Carvana rejects the accusation
- Investors are gearing up for volatility ahead of the Feb. 18 earnings report
Carvana Co. (CVNA) shares jumped roughly 8% on Thursday, rebounding from a steep drop sparked by a short-seller report the day before. The stock climbed $31.98 to $442.02 in morning trading, following Wednesday’s close at $410.04.
Investors are weighing if the report is just a one-day shock or if its effects will stretch into earnings season. The stock’s volatility is crucial since doubts around accounting and related-party transactions usually cut deepest when confidence falters.
On Wednesday, Gotham City Research, a short seller betting against the stock, claimed Carvana overstated its 2023-2024 earnings by over $1 billion and relied more heavily on related-party transactions than revealed. Gotham also predicted delays in Carvana’s upcoming 10-K filing with the U.S. Securities and Exchange Commission and said earlier reports would be restated. gothamcityresearch
Carvana pushed back against the accusations, labeling the report “inaccurate and intentionally misleading.” It insisted that all related-party transactions appear clearly in its financial disclosures. The company originated within DriveTime before spinning off prior to going public, with both firms connected to the Garcia family. Barron’s
Gotham’s report knocked Carvana’s shares down 14.2% on Wednesday, with even steeper losses earlier in the session, reigniting scrutiny over the company’s connections to DriveTime and loan-servicer Bridgecrest, according to the Financial Times. After nearly going bankrupt in 2022, Carvana pushed through cost cuts and a restructuring that had lifted its stock above $470—until this week’s setback. Financial Times
BTIG’s Marvin Fong stuck with a Buy rating and a $535 price target, saying the harshest claims out there “are not well-founded.” He challenged the numbers linked to DriveTime’s leverage and servicing economics, per Investing.com. Investing.com Nigeria
JPMorgan lifted its price target to $510 from $490 in a quarterly preview released before the selloff, predicting a “solid beat and raise” for the fourth quarter. The bank adjusted estimates around pricing and spending and included the impact of new vehicle franchise acquisitions. TipRanks
In other auto retail news, CarMax dropped roughly 1%, with AutoNation and Lithia Motors sliding about 3% and 2%, respectively. The divergence highlighted that Carvana’s decline stemmed from company-specific news rather than a broad sector sell-off.
The short seller’s argument also flagged a procedural risk: Bloomberg reported that Gotham claimed Carvana might have to postpone its annual report filing. Any late filing, accounting restatement, or intensified scrutiny over related-party financing could keep the stock on a rollercoaster. Bloomberg.com
Investors are focused on Feb. 18, when Carvana is set to release its fourth-quarter and full-year results after market close, followed by a call at 5:30 p.m. ET. Market watchers will be keen to hear how management tackles the recent allegations and if there are any hints about changes to disclosure or filing schedules. investors.carvana.com
