Story perspectives

Carvana Shares Plunge 16% Amid Earnings Allegations

1/29/2026

Summary

Story summary

On January 28, 2026, Carvana Co.'s shares fell over 16% after a report by Gotham City Research.
The report alleges Carvana overstated its 2023-2024 earnings by $1 billion and relied on DriveTime and Bridgecrest, linked to CEO Ernie Garcia III's family.
The allegations raise concerns about Carvana's accounting, business practices, and potential regulatory trouble.
The authenticity of the financial data cited by Gotham City Research has not been independently verified.

History

Historical Context

The Enron scandal, which culminated in the company's bankruptcy on December 2, 2001, exposed extensive accounting fraud that resulted in $74 billion in shareholder losses. This led to the dissolution of Arthur Andersen, a major auditing firm, and prompted the enactment of the Sarbanes-Oxley Act in 2002, aimed at enhancing corporate governance and financial transparency in the wake of similar allegations against companies like Carvana.

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Story summary

On January 28, 2026, Carvana Co.'s shares fell over 16% after a report by Gotham City Research.
The report alleges Carvana overstated its 2023-2024 earnings by $1 billion and relied on DriveTime and Bridgecrest, linked to CEO Ernie Garcia III's family.
The allegations raise concerns about Carvana's accounting, business practices, and potential regulatory trouble.
The authenticity of the financial data cited by Gotham City Research has not been independently verified.

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