🚀 AI-picked stocks soar in May. PRFT is +55%—in just 16 days! Don’t miss June’s top picks.Unlock full list

Kerrisdale Capital reveals short position in used-car firm Carvana

Published 02/26/2024, 11:32 AM
Updated 02/26/2024, 03:20 PM
© Reuters. Carvana logo is seen in this illustration taken June 27, 2022. REUTERS/Dado Ruvic/Illustration/File Photo
CVNA
-

(Reuters) -Investment firm Kerrisdale Capital disclosed a short position in Carvana on Monday, calling it a "poorly capitalized, growth-challenged auto retailer".

Shares of Carvana have surged nearly 40% after the used-car retailer posted its first annual profit last week, a sharp turnaround powered by cost cuts and a debt-reduction deal with bondholders. On Monday, shares of the company were up about 3% in afternoon trade.

"Carvana’s valuation was already stretched – now, its share price is so ridiculous that it doesn’t just trade at levels unheard of for an auto dealer, it trades at a premium to leading tech companies," Kerrisdale Capital said in a statement.

Carvana had $2.32 billion in short interest, or 39.6% of its free float in short position, as of Friday, according data and analytics firm Ortex.

© Reuters. Carvana logo is seen in this illustration taken June 27, 2022. REUTERS/Dado Ruvic/Illustration/File Photo

"In addition to the disappointing growth outlook, there are signs that further improvement in unit economics is nearing an end," Kerrisdale Capital said in a statement.

Carvana declined to comment on Kerrisdale's report.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.