Carvana Co. (NYSE:CVNA) is currently under investigation by Bragar Eagel & Squire, P.C., a law firm specializing in stockholder rights. The focus of the investigation is on potential violations of federal securities laws and other unlawful business practices. This comes in the wake of allegations made by Gotham City Research, a short seller, claiming that Carvana's profitability is heavily reliant on undisclosed related-party transactions with DriveTime and Bridgecrest.
The report from Gotham City Research suggests that DriveTime has expended over $1 billion in cash and leveraged up to 20 to 40 times EBITDA to bolster Carvana's earnings. Furthermore, it alleges that Bridgecrest has marked down billions in loans while Carvana recognized gains on these loan sales. These allegations have sparked concerns among investors, leading to a notable decline in Carvana's stock price.
Following the publication of the report, Carvana's stock price experienced a drop of $67.68 per share, or approximately 14.2%, from $477.72 on January 27, 2026, to $410.04 on January 28, 2026. Despite these challenges, Wells Fargo has maintained its "Overweight" grade for Carvana, with a price target increase from $500 to $525, indicating that some analysts still see potential in the stock amidst recent issues.
As of now, Carvana's stock price stands at $401.11, reflecting a decrease of 6.16% or $26.33. The stock has seen fluctuations between a low of $396.61 and a high of $427.50 today. Over the past year, Carvana has witnessed a high of $486.89 and a low of $148.25, indicating significant volatility. The company's market capitalization is approximately $86.96 billion, with a trading volume of 3,837,659 shares on the NYSE.
