PORTFOLIO FORUM

Jött ma egy level a Hindenburgtol, utolerte a cegzet a Carvanat. Remelem "Barnabas" baratunk idoben eltette a 80x hozamot, amit osszekalapozott vele :)

Janos torold nyugodtan, ha tul off.

Carvana: A Father-Son Accounting Grift For The Ages

(NYSE:CVNA)

Carvana (CVNA) is a $44 billion online car dealer founded in 2012. Its main business is an online platform that allows retail customers to buy and sell used cars.
Despite facing bankruptcy risks in 2022 and 2023, Carvana’s stock spiked 284% in 2024, with investors believing the company’s worst days are behind it.
However, our research, including extensive document review and 49 interviews with industry experts, former Carvana employees, competitors and related parties of the company, undertaken over the course of 4 months, shows Carvana's turnaround is a mirage.
Our research 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.
Even before considering the findings of our investigation, Carvana is exorbitantly valued, trading at an 845% higher sales multiple relative to online car peers CarMax and AutoNation, and a 754% premium on a forward earnings basis. The company has ~$4.8 billion in net debt and is junk-rated by ratings agencies.
Carvana’s business already faces major headwinds. Used vehicle prices have declined 20.3% in the past 3 years, according to the Manheim Price Index. Subprime auto loan delinquencies are now higher than during the Global Financial Crisis, per Fitch.
Previously, Carvana CEO Ernie Garcia III’s father, Ernest Garcia II, sold $3.6 billion in stock between August 2020 and August 2021. In the year after he stopped selling, Carvana’s stock plunged 99% and faced bankruptcy concerns shortly thereafter.
Since 2023 we see the same trend: Carvana has touted a bright future and posted three consecutive quarters of modest positive net income, an aggregate of $245 million, despite stress in the used auto market.
For every $1 in net income it reported, the company has added $139 in market cap – a $34 billion market cap increase. With Carvana shares up ~42x, father Ernest Garcia II has sold another $1.4 billion in Carvana stock.
As insiders unload stock, the company's solvency risks remain. Almost 26% of Carvana’s gross profit consisted of sales of customer auto loans to third parties, largely in the risky subprime and deep subprime space. Gain on loan sales represented 2.2x Carvana’s net income in the past 9 months.
Carvana has relied on a purchase commitment agreement with Ally Financial, to which it sold $3.6 billion of vehicle loans in 2023, ~60% of its total originations.
Carvana has told investors for at least 6 years that it is seeking to diversify outside of its relationship with Ally, but thus far has not announced new financing partners.
After calling off an earlier agreement in principle with Carvana around 2019, a Wells Fargo senior manager told us: “As we dug into it, the more we learned, the less we liked about it.” They cited specific concerns about lax underwriting and related-party loan servicing.
As subprime auto has declined, Ally has amended its arrangement with Carvana 5 times in the last two years. Each time, Carvana redacts crucial information that would help investors understand the terms of the relationship.
Over the last 2 years, Ally’s loan book has become increasingly concentrated, with Carvana loans rising from 5% of its consumer auto portfolio to 8.4%. In September 2024, Ally’s stock fell 20% after warning investors that “on the retail auto side, our credit challenges have intensified”.
Sales to Ally have scaled back year to date through September 2024. Carvana sold $2.15 billion of loans to Ally in the period (~$2.86 billion on an annualized basis), only 35% of total originations. This compares to $3.6 billion in loans or 60% of total originations in 2023.
One Ally executive told us: “We've pulled back from them [Carvana] pretty significantly in 2024. Ally’s Carvana purchase commitment extends to January 2025, posing a near-term risk to Carvana’s business model should it renegotiate on less-favorable terms.
With Ally pulling back, a new, unnamed buyer has quietly emerged exactly when Carvana needed it. In the past two quarters, Carvana sold $800 million in loans to an “unrelated third party.” The mystery buyer made up 18.3% and 16.3% of total loan sales in Q2 and Q3 2024.
Lien filings reveal the buyer is likely a trust affiliated with Cerberus Capital, where Carvana Director Dan Quayle is Chairman of Global Investments, indicating the new buyer is an undisclosed related-party, contrary to the company’s claims.
These suspected financing games are occurring as Carvana faces major economic headwinds— 44% of loans for cars purchased since 2022 are underwater, per a recent survey from CarEdge.
Carvana’s “originate to sell” model is highly skewed to packaging non-prime and subprime borrower loans. Per a former Carvana director: “I don't think the model is much different than what we saw with kind of the early 2000 mortgage-backed securities".
Almost 44% of Carvana’s loans it sells in ABS deals are non-prime. Over 80% of its recent non-prime ABS deals have weighted average FICO scores in the “deep subprime” range, the riskiest levels, per Morningstar data.
Carvana’s toxic loan book is a result of lax underwriting standards: “We actually approved 100% of the applicants”— interview with a former Carvana director describing virtually non-existent underwriting standards.
Carvana has issued over $15.4 billion of asset-backed securities (ABS), which it retains partial interest in on its balance sheet. 60-day delinquencies across its supposedly “prime” borrowers are over 4x industry averages.
A former Ally executive told us: “Those numbers… my heart might have skipped a few beats…. Those loss numbers are high. The delinquencies across 30/60 buckets are high.”
Carvana's subprime loans had the highest increase in borrower "extensions" of any subprime auto issuer, a major sign of stress, per S&P data. Carvana’s extensions more than doubled this year, while most peers saw declines.
With its market collapsing, Carvana has propped up its numbers through a grab bag of related-party accounting games.
For example, Carvana’s increase in borrower extensions is enabled by its loan servicer, an affiliate of private car dealership DriveTime, run by Carvana’s CEO’s father. The company seems to be avoiding reporting higher delinquencies by granting loan extensions instead.
In another example, in 2023, $145 million of “other revenue” or ~8.4% of gross profit came from related parties. This included $138 million of commissions and profit-share from DriveTime.
Carvana appears to be dumping unreported costs of extended warranties onto related-party DriveTime, resulting in artificially inflated revenue and profitability. We estimate Carvana reports ~58% more warranty income per sale due to the relationship.
A former Carvana leader told us that warranty reimbursements from related-party DriveTime were “pretty generous… back to Carvana” as a way of showing better revenue to public investors.
A former director told us: “As a related-party, we're [Carvana] able to kind of have an agreement that is favorable to pull as much of that profit forward.”
Additionally, instead of marking down inventory, Carvana can offload cars to related-party DriveTime at a premium. Over the last three fiscal years, Carvana has generated $105 million revenue from selling cars wholesale to DriveTime.
A former Carvana director responsible for wholesale inventory told us: “[Selling cars to DriveTime is] a lever that's not talked about. It's kind of like Fight Club… there's certain things we don't talk about, and we don't talk about DriveTime.”
Carvana engaged in “sham” deals with DriveTime, along with numerous other improprieties, per allegations in a 2024, 332-page amended class action lawsuit brought by two pension funds, which included information from 12 confidential witnesses.
These sketchy related-party dealings seem to be enabled by conflicted board members. Carvana’s “independent” audit committee has two individuals that served on the board of related-party DriveTime.
One “independent” member of the audit committee, Greg Sullivan, was previously suspended by the New York Stock Exchange after he sent money to Carvana’s CEO’s father in contravention of a prohibition order, per legal records.
Carvana’s CEO’s father, the key shareholder dumping billions in stock, previously pled guilty to felony bank fraud over allegations that he helped a company report fake accounting income through sham transactions. SEC charges also alleged he “signed a falsified letter for [the company’s] auditors”.
In addition to the grab bag of related-party tricks, Carvana exhibits a litany of other accounting issues.
Carvana’s CEO has said: “We don't end up taking the credit risk over an extended period of time.” Yet Carvana’s loans held on its books have increased 50% since 2021, to $553 million in Q3 2024. Carvana uses an accounting treatment that records no loss reserves on these loans at booking.
A former executive confirmed that Carvana could “move very large amounts of income around quarter to quarter” by holding loan sales over the quarterly line.
For example, on May 4th, Carvana reported Q1 2023 earnings, showing a 41% y/y decline in loan sales, swinging to negative adjusted EBITDA amidst bankruptcy concerns. CEO Ernie Garcia blamed the delayed loan sales on “uncertainties” in the securitization market.
Against this backdrop, with the stock price depressed, the Garcias signed an agreement to purchase $126 million in Carvana stock on July 17th, 2023.
Two days later, Carvana announced the “best quarter in company history,” featuring a massive earnings beat from re-accelerated loan sales, as well as the successful restructuring of its debt. The Garcias are up ~$427 million on those precisely-timed purchases.
In Q3 2024, Carvana reported $3,497 in retail gross profit per unit, a key metric for investors to understand the profitability from the sale of retail units.
Carvana inflates this key metric by ~34.5% by dumping an estimated $390 million of selling costs into SG&A annually, in stark contrast to accounting practices at competitors.
In August, 2023, Carvana told investors its cost reduction measures did not impact quality. But a former reconditioning leader told us otherwise: “They did make an adjustment to the standards, but only for that segment. They call it their economy line. I don't think they talk about that.”
Overseeing all this for 10+ years is Carvana’s mid-tier auditor, Grant Thornton, which also has/had a relationship with related-party DriveTime. “We are not doing what the market thinks. We are not looking for fraud… we are not set up to look for fraud” – Former Grant Thornton UK CEO.
Finally, Carvana is subject to an undisclosed SEC investigation, per Disclosure Insight, a Freedom of Information Act (FOIA) intelligence firm. We think the company should clarify to the market whether it has faced SEC investigations and their status.
Overall, we think the Garcias will leave shareholders with nothing. At any point in Carvana’s two incredible stock runs, it could have raised significant capital and de-risked its balance sheet.
Instead, the company has pushed off creditors and engaged in accounting games while the CEO’s father dumps billions in stock. We think Carvana is truly an accounting grift for the ages— we see rough times ahead for both stockholders and bondholders.

Initial Disclosure: After extensive research, we have taken a short position in shares of Carvana Co. (NYSE:CVNA). This report represents our opinion, and we encourage every reader to do their own due diligence. Please see our full disclaimer at the bottom of the report.

terelemel 2025. 01. 02. 16:01

#115339

Vajon mi lehet(ett) ennek a valodi oka?
https://www.portfolio.hu/gazdasag/20250102/majdnem-rekordot-dontott-a-brit-jegybank-732365

KrisztinaI 2025. 01. 02. 15:30

Előzmény: #115334 Nedden

#115338

Perzse, de ezt az átlag ember nem érti, csak azt, amit a benzinkúton kiírnak előtte ártáblára....erre majd sokkal később fog rájönni, addig minden OK.

KrisztinaI 2025. 01. 02. 15:26

Előzmény: #115333 mamoka47

#115337

A kínai piac akkor fog nőni, amikor elkezdenek mögé érdemben pénzt nyomtatni.... egyszer valaki megrajzolta, hogy ez a mennyiség, amiket itt bejelentettek, a kanyarban sincsen ahhoz, hogy érdemben mozogni kezdjen felfelé. A US tőzsdét két dolog vette: AI+ a pénznyomda.

mamoka47 2025. 01. 02. 15:20

#115336

Az Indiai tőzsde a Nifty50 5 éves hozama 102%! Ezzel szemben a Hang Seng csinált egy laza -25%-ot 5 év alatt. Tényleg fundásan India 100%-al nőtt, és Kína 25%-al leértékelődött?? Ez komoly? Sétálj már végig Delhiben és Shanghai-ban az utcán. Tényleg Kína zuhanna? Ha-Ha-Ha!! Vagy csak kínában van korrupció,és indiában nincs? Ne vicceljünk már.

Zedisdead 2025. 01. 02. 15:19

#115335

*TESLA 4Q DELIVERIES 495,570, EST. 512,277
Spy/nasdaq short? Nem tom melyikben van Tesla

Nedden 2025. 01. 02. 15:16

Előzmény: #115332 KrisztinaI

#115334

USD jelenleg segít is! Kilőtt a dollár. Persze ez USA import infláción meg is fog látszódni.
WTI/USD

mamoka47 2025. 01. 02. 15:09

Előzmény: #115331 KrisztinaI

#115333

Majd ha a kínai kommunista pártnak is olyan fontos lesz a tőzsde (és a lassan 100 000 000-ra hízó kínai befektetők tömege) mint a FED-nek az( USA ETF-ek, befektetési alapok, nyugdíj alapok hozama, az SP500 korrekciója max 20% lehet)) , attól kezdve ott is eljön az örök LONG ideje. Addig marad a soha véget nem érő rángatása a piacoknak(itt 15-30% meg sem kottyan, és az is inkább lefelé mint felfelé.) Az látszik hogy a kínai tőzsdéken lefelé nincs fék. Csak mazochistáknak ajánlott!!!

KrisztinaI 2025. 01. 02. 15:08

Előzmény: #115329 Nedden

#115332

Szerintem sokkal egyszerűbb: ha elvben az inflációt (vagy annak inkább egy részét) alacsonyan akarja tartani a népszerűség kedvéért,akkor az olaj ára nem emelkedhet semmilyen módon.

KrisztinaI 2025. 01. 02. 14:55

Előzmény: #115330 mamoka47

#115331

Van valami abban, amit mondasz, ugyanakkor érdekes, hogy Európát olcsónak tekintik....ami csak arra vár, hogy fellendüljön.... nem értem, hogy mihez hasonlítják, de már hallottam egy párszor ezt a kifejezést.
Egyébként funda is van mögötte: az amerikai gazdaság outperformance-ja egyelőre ténylegesen létezik, nem véletlen, hogy oda áramlik a pénz.... de az okos emberek is kezdenek aggódni, hogy egyelőre jobbat nem tudnak mondani, de ha mindenki teljes gázzal ott van, akkor ez kezd már egy kicsit rossz érzést kelteni....

mamoka47 2025. 01. 02. 14:26

Előzmény: #115322 mereszZenesz

#115330

Hagyjuk már ezt a fundásan igy vagy úgy! Ha fundásan nézed a BUX-nak és a DAX-nak hol kéne lenni? Biztos hogy 100 éves csúcson? A kínai piac merő politika. Bármit dugsz.... az a nyugati gazdasági média szerint csak szar lehet. Komolyan azt hiszed hogy a világ többi földrészének piacai mind pl:USA, Európa, Brazilia, India stb stb mind fundás alapon vannak csúcson? Érdekes hogy csak a Kinai érdekszférába tartózó piacok vannak 5 éves távlatban bukóban.

Nedden 2025. 01. 02. 13:37

Előzmény: #115324 pomperj

#115329

Trump egy “dinoszaurusz” az olaj hajtotta időszakban élt. Ma is ezt akarja visszahozni. De sajnos ott az OPEC+ és a BRICS. Akik teljesen más irányt szeretnének. Illetve tévedek mert most hirtelen az OPEC+ sem tudja mi legyen. Afrikai kitermelők és Venezuela egyértelműen közölte ha az olajár lejjebb megy kénytelenek növelni a kitermelést, mert elszállt az államháztartásuk és még nincs “B” terv arra, hogy mi lesz ha nincs olaj bevétel.
Szaúd-Arábia most nagyon furcsa és kiszámíthatatlan. Óriási lett az érdekkülöjbség az OPEC- ben.
De több külföldi elemző az olajipar talán utolsó nagy sóhaját, emelkedését várja.
Érdemes nézni a nagyok pl. WB hogyan súlyozza portfolióját.

KrisztinaI 2025. 01. 02. 13:16

Előzmény: #115326 pomperj

#115328

Működik a commodity market most is, de igazad van, nem a nagy ETF az olaj miatt: tojás, kakaó, kávé és társai szárnyalnak.... látjuk a boltban is.

Boole 2025. 01. 02. 12:50

Előzmény: #115326 pomperj

#115327

Azt gondolom, hogy hosszú befektetésre az AMD, QCOM, LAC, RIG lassan jó lehet a mostani árazások mellett.

pomperj 2025. 01. 02. 12:26

#115326

DBC chart,
a legnagyobb tenyezo az olaj benne
.
https://imgur.com/a/O6eZFtw

pomperj 2025. 01. 02. 11:11

Előzmény: #115320 Cinderella74

#115325

BABA, 9988
https://imgur.com/a/MFwd2MD

pomperj 2025. 01. 02. 10:28

#115324

1)SPY
Rivid daytrade tavon (15-60min) egy atfedes miatt nem tiszta a szerkezet: lehet 3 ALT esetet is sejteni.
.
https://imgur.com/a/QiQActg
.
A NAPOS charton kis recovery volt, de ujra lefele fordult az oscillator. Eddig -4% eses van 4 het alatt.
Most a SELL signalok dominalnak a NAPOS chartokon, minden indexben.
DOW daily:
.
https://imgur.com/a/BUl6DGm
.
2)Gold, silver
Gold az utolso 3 napban erosebb volt a vartnal, es lehet hogy nem a-b-c jellegu, hanem az oldalazos
es kevesbe mely ABCDE korrekcios alakzat formalodik:
.
https://imgur.com/a/BmAeqld
,
https://imgur.com/a/OpwHdFm
.
3)Oil
a szakma tele van talalgatassal, mit fog csinalni a Trump.
A tobbsegi velemeny, hogy uj furasi engedelyeket adnak federal hataskori land es tengeri furasokra.
Az amerikai energia arakat lefele, mindenki maset felfele akarjak tolni.
Ezert kozben megprobaljak az orosz olajszallitasokat, es egyes arab olajexportokat csokkenteni.

krida 2025. 01. 02. 10:01

#115323

NG: célár elérve
Nasdaq: naposon 21.400 alatt továbbra is 20.500 a céláram (hetesen, ha holnap esetleg nem takarodik vissza fel az emelkedő ékbe, akkor 18.500 a céláram)
WTI: most megnéztem a grafikont, egész pontosan 75,1 $ alatt 64 $ a céláram hetesen. Ha fölémenne akkor negligálom ezt.