Carvana (CVNA) Shares Tumble as Forensic Research Firm Hindenburg Takes Aim, Concludes Company's Turnaround is a "Mirage" - Hagens Berman

CVNA Investors with Losses Encouraged to Contact the Firm 

SAN FRANCISCO, Jan. 6, 2025 /PRNewswire/ -- Carvana Co. (NYSE: CVNA) shares tumbled nearly 13% during the two days ended Jan. 3, 2025 as the market digested a scathing report published by Hindenburg Research on Jan. 2, 2025.

Hagens Berman has opened an investigation and urges investors in Carvana shares who suffered substantial losses to submit your losses now.

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Carvana Co. (CVNA) Investigation:

The investigation is focused on the propriety of Carvana's disclosures about related party transactions under applicable accounting rules and SEC rules and regulations.

On January 2, 2025, Hindenburg Research, a prominent forensic financial research firm, released an incisive report titled "Carvana: A Father-Son Accounting Grift For The Ages." This comprehensive document is the culmination of four months of meticulous investigation, involving 49 interviews with industry experts, former employees, competitors, and related parties of Carvana.

The report highlights a significant finding: "[d]espite facing bankruptcy risks in 2022 and 2023, Carvana's stock spiked 284% in 2024, with investors believing the company's worst days are behind it [….] [but] Carvana's turnaround is a mirage." 

Key to Hindenburg's scrutiny is Carvana's purchase commitment agreement with Ally Financial, through which the company offloaded $3.6 billion in vehicle loans (~60% of Carvana's total originations) in 2023. Hindenburg's analysis reveals a troubling trend: as of September 30, 2024, Carvana's sales to Ally had waned significantly, and that:

1. "a new, unnamed buyer has quietly emerged exactly when Carvana needed it[;]" 
2. "[i]n the past two quarters, Carvana sold $800 million in loans to 'an unrelated third party[;]'"
3. "[t]he mystery buyer made up 18.3% and 16.3% of total loan sales in Q2 and Q3 2024[;]" and
4. "[l]ien filings reveal the buyer is likely a trust affiliated with Cerberus Capital, where Carvana Director Dan Quayle is Chairman of Global Investments, indicating the new buyer is an undisclosed related-party, contrary to the company's claims."

The report's publication triggered an immediate market response, causing Carvana's share price to plummet by $25.84, or 12.7%, over two trading sessions, concluding on January 3, 2025.

"We're focused on whether Carvana may have misled investors during 2024 if, as Hindenburg alleges, the company offloaded vehicle loans to a related party in the wake of Ally's apparent scaling back of its purchases," said Reed Kathrein, the Hagens Berman partner leading the investigation.

If you invested in Carvana and have substantial losses, or have knowledge that may assist the firm's investigation, submit your losses now »

If you'd like more information and answers to frequently asked questions about the Carvana investigation, read more »

Whistleblowers: Persons with non-public information regarding Carvana should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. Under the new program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, call Reed Kathrein at 844-916-0895 or email [email protected].

About Hagens Berman
Hagens Berman is a global plaintiffs' rights complex litigation firm focusing on corporate accountability. The firm is home to a robust practice and represents investors as well as whistleblowers, workers, consumers and others in cases achieving real results for those harmed by corporate negligence and other wrongdoings. Hagens Berman's team has secured more than $2.9 billion in this area of law. More about the firm and its successes can be found at hbsslaw.com. Follow the firm for updates and news at @ClassActionLaw. 

SOURCE Hagens Berman Sobol Shapiro LLP