Carvana Stock Drops After Short-Seller Report
Carvana stock plunged after a short-seller report alleged a $1B earnings overstatement via related-party deals, triggering volatile trading and a rebound.
KEY TAKEAWAYS
- Gotham alleged Carvana overstated 2023-24 earnings by more than $1 billion via related-party transactions.
- Shares closed at $410.04, down 14.2% following the report.
- Trading showed intraday swings near 20% and a rebound exceeding 15% from the low.
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Carvana stock fell on Jan. 28, 2026, after Gotham City Research released a short-seller report alleging the company overstated 2023–24 earnings through undisclosed related-party transactions. The shares partially rebounded in trading the following day.
Short-Seller Allegations and Market Reaction
Gotham City Research published its report at 11:34 a.m. ET on Jan. 28, accusing Carvana of overstating its 2023–24 earnings by more than $1 billion through undisclosed related-party transactions. The report, which disclosed a short position in Carvana stock, said the company was "far more dependent on related parties" connected to the family than previously disclosed.
Shares closed at $410.04 that day, down 14.2%, after reaching a 2026 high of $486.89 earlier in the year amid a 13.0% year-to-date rally. Intraday swings reached about 20%, and trading the following day produced a rebound exceeding 15% from the prior low. The combination of the earnings-quality allegation and abrupt price volatility highlights heightened near-term trading and governance risk for Carvana shareholders.
