New York, Jan 29, 2026, 05:03 EST — Premarket
- CVNA dropped 14.2% Wednesday following a short-seller report claiming undisclosed related-party support
- Gotham City Research claimed Carvana overstated its 2023-2024 earnings by more than $1 billion
- Investors are now eyeing the Feb. 18 results for clues on management’s next move and possible filing updates
Carvana Co (CVNA) shares drew attention ahead of Thursday’s U.S. session after dropping 14.2% on Wednesday to close at $410.04. The slide came after activist short seller Gotham City Research released a bearish report targeting the online used-car seller.
The sharp selloff halted a recent surge in the stock. Carvana ended Tuesday at $477.72, setting the stage for a swift pullback as the headlines surfaced.
Why it matters now: the report zeroes in on the mechanics driving Carvana’s profits — specifically, its auto loans and agreements with firms connected to its largest shareholder. Related-party transactions, simply put, involve deals with insiders or their close associates. These arrangements usually face heightened scrutiny, especially when a stock is valued on the hope of a smooth turnaround.
Gotham claims Carvana’s 2023-2024 earnings are inflated by more than $1 billion and rely heavily on related-party transactions that weren’t fully disclosed. The firm also pointed out that DriveTime’s leverage props up Carvana’s adjusted EBITDA — a profit figure that excludes certain expenses. Gotham expects Carvana’s 2025 Form 10-K filing will be delayed and anticipates restatements of earlier 10-Ks.
Carvana fired back. A spokesperson told Benzinga the report was “inaccurate and intentionally misleading,” adding the company plans to release its financial results on Feb. 18. Benzinga
The allegations focus on firms connected to the Garcia family, founders of Carvana who still hold significant shares. Gotham highlighted DriveTime Automotive, a private sibling company, noting its financial troubles amid Carvana’s better performance. At the same time, DriveTime’s debt increased and cash burn accelerated through 2023 and 2024.
Wednesday’s session laid bare the pressure on Carvana. The stock dipped to $374.55 at its weakest point and closed with about 19.7 million shares changing hands, per historical data — a volume well beyond the stock’s typical daily average.
Peers didn’t follow suit. CarMax shares climbed 1.34% Wednesday, while ACV Auctions dropped 3.71% and OPENLANE inched higher. This points to selling pressure focused on Carvana, not the used-car retail sector as a whole.
Carvana has faced battles like this before. Back in January 2025, short seller Hindenburg Research announced a short position in the stock and accused the company of manipulating its accounts — claims Carvana denied as misleading and false.
Investors face more than just the immediate headline impact. Gotham’s report predicts a delayed 2025 10-K filing and hints at possible restatements for 2023 and 2024. It even called out the company’s auditor specifically. If these scenarios gain traction, the stock could stay volatile for some time.
The next key event is set: Carvana will report its fourth-quarter 2025 results on Feb. 18 at 5:30 p.m. ET. Investors will be tuned in for the management’s take—and any clues, subtle or clear, about when the SEC filing might drop.
