New York, January 30, 2026, 12:09 (EST) — Regular session
Carvana Co shares dropped 4.4% to $408.46 by midday Friday, extending the online used-car seller’s rocky run this week. Earlier, the stock bounced between $401.77 and $427.77 during the session.
The pullback is notable because Carvana has ridden momentum since its turnaround and only joined the S&P 500 in late December—a spot that usually attracts steady index fund buying. That means any sudden hits to credibility, like accounting or funding concerns, become tougher for investors to ignore. 1
Friday’s trading highlighted the spotlight on Carvana’s profit narrative, which leans heavily on its auto-loan business, not merely vehicle margins. Short sellers — those betting against the stock by borrowing and selling shares — have been pushing this argument hard.
Gotham City Research claimed this week that Carvana’s earnings for 2023-2024 were inflated by over $1 billion, relying more heavily on related-party support than investors realized. The short seller also predicted a delay in Carvana’s 2025 annual report—the 10-K required by the SEC—along with restatements of earlier filings and the resignation of auditor Grant Thornton. 2
Carvana pushed back against the claims. A company spokesperson labeled Gotham’s report as “inaccurate and intentionally misleading,” adding that related-party transactions had been fully disclosed. The spokesperson also highlighted Carvana’s upcoming 2025 results release scheduled for Feb. 18. 3
The stock plunged roughly 14% Wednesday following the report, then bounced back 5.3% Thursday as a few analysts challenged Gotham’s calculations—a volatility that highlighted just how quickly market sentiment is turning. 4
JPMorgan’s Rajat Gupta kept his Overweight rating and $510 price target intact, criticizing the short report for an “incorrect representation” of DriveTime-related service income. He also flagged its repeated confusion of cumulative fair-value figures with annual metrics, calling it a “significant misrepresentation of facts.” Gupta said he was caught off guard by how much the stock sold off, given what he sees as straightforward securitization economics. 5
Other analysts jumped to Carvana’s defense. William Blair’s Sharon Zackfia pointed out the company’s strong consumer draw and noted it’s already the second-largest used car seller in the U.S. BTIG’s Marvin Fong stuck to his Buy rating with a $535 price target, pushing back against several of Gotham’s numbers. 6
Loan monetization lies at the heart of the dispute — specifically, how Carvana offloads or securitizes auto loans and reports the resulting gains. Servicing fees linked to those loans are also under scrutiny. Analysts zeroed in on asset-backed securities (ABS), which are bonds secured by loan pools, as well as on “adjusted EBITDA,” a profit measure that excludes specific expenses. These elements revealed major gaps in assumptions and definitions.
The short report’s allegations are already reflected in the tape, which is enough to keep a high-beta stock volatile. New information on related-party disclosures, loan-sale accounting, or funding access could swiftly shift expectations, one way or the other.
Carvana’s next big event is set for Feb. 18, when it will release its Q4 and full-year 2025 results after the market closes, followed by a 5:30 p.m. ET conference call. Investors will focus closely on management’s commentary about loan economics and disclosure methods, beyond just tracking unit growth and margin performance. 7
