Short Seller Accuses Carvana of Inflating Profits by Over $1 Billion, Hiding Related-Party Transactions

U.S. online used-car retailer Carvana has come under fire from short-seller Gotham City Research. In a report released on January 29, the firm accused Carvana of inflating its net profit by over $1 billion between 2023 and 2024 and concealing its close ties to DriveTime—an affiliated company controlled by Carvana CEO’s father. The report alleged that Carvana’s reliance on DriveTime far exceeded what it had disclosed and highlighted irregularities in its accounting for sales commissions and post-loan servicing fees. Gotham City Research predicted that Carvana would delay filing its 2025 Form 10-K annual report, that its 2023 and 2024 financial statements might need restatement, and that its auditor, Grant Thornton, could ultimately resign.