What's Going On With Carvana Stock Monday?

Carvana Co CVNA shares are trading higher Monday after a company subsidiary amended an agreement to reestablish a $4 billion commitment for automotive finance receivables.

What Happened: In a new regulatory filing, Carvana said subsidiary Ally, consisting of Ally Bank and Ally Financial, amended the restated master purchase and sale agreement to reestablish a commitment by Ally to purchase up to $4 billion of automotive finance receivables between Jan. 3, 2025 and Jan. 2, 2026.

The news comes after Carvana shares came under pressure at the end of last week after short seller Hindenburg Research announced a short position against the company and released a report alleging accounting manipulation and lax underwriting practices.

The report titled, "Carvana: A Father-Son Accounting Grift For The Ages," claims the alleged accounting manipulation "fueled temporary reported income growth." The short seller also claimed to have found $800 million in loan sales to a "suspected undisclosed related party."

Hindenburg went on to highlight recent insider selling, suggesting the company's share price is inflated. The short seller highlighted valuation metrics that suggest the stock is "exorbitantly valued" versus competitors.

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Carvana shares are up more than 275% over the past year. Analysts have raised price targets as the company has continued to show progress on its turnaround plans. Hindenburg claimed last week that Carvana’s turnaround is merely a “mirage.”

A Carvana spokesperson told Benzinga last week that Hindenburg’s report was "misleading and inaccurate.” The company spokesperson noted that Hindenburg is a short seller looking to benefit from a decline in Carvana’s stock price. 

“We plan to stay focused on executing our plan for another great year in 2025," the Carvana spokesperson said.

Wells Fargo analyst David Lantz maintained Carvana with an Overweight rating on Monday and lowered the price target from $300 to $275.

CVNA Price Action: Carvana shares were up 2.81% at $182.13 at the time of publication Thursday, according to Benzinga Pro.

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