Hindenburg Research disclosed a short position in Carvana on Thursday, claiming the company's recent turnaround is a"mirage" that is being propped up by unstable loans and accounting manipulation.
CNBC could not immediately verify the claims in the Hindenburg report, and Carvana declined to comment.The report centers on Carvana's practice of loan sales as well as the business relationship between CEO Ernie Garcia III and his father, Ernest Garcia II, who is Carvana's largest shareholder. Hindenburg says it uncovered $800 million in loan sales"to a suspected undisclosed related party, along with details on how accounting manipulation and lax underwriting have fueled temporary reported income growth — all while insiders cash out billions in stock."