"Over the past month, investors have seen Carvana (NYSE:CVNA) shares fall over 20%, while retail investor sentiment on Reddit and X shifted from cautious optimism to deeply bearish. The stock trades a little over $360 today, down from almost $490 weeks earlier. The selloff intensified after Gotham City Research published a report at the end of January, alleging that Carvana overstated earnings by more than $1 billion through undisclosed related-party transactions with DriveTime and Bridgecrest."
"The company dismissed the claims as "inaccurate and intentionally misleading," but multiple law firms launched securities class-action investigations, which immediately damaged investor confidence. Carvana mentions on Reddit spiked following the fraud allegations, with discussions shifting to outright skepticism. On r/stocks, users are calling for management to address accounting concerns before the February 18, 2026, earnings release. One widely discussed post titled " Carvana CVNA Should Delay Earnings Report and Come Clean on Accounting Discrepencies " captured the mood, arguing that continued silence will worsen legal exposure."
Carvana shares plunged over 20% in the past month, falling to just above $360 from nearly $490 as retail investor sentiment turned sharply bearish on Reddit and X. Gotham City Research alleged that Carvana overstated earnings by more than $1 billion through undisclosed related-party transactions with DriveTime and Bridgecrest. The company labeled the claims "inaccurate and intentionally misleading," while multiple law firms opened securities class-action probes that damaged investor confidence. Reddit users demanded management address accounting concerns before the February 18, 2026 earnings release, citing coordinated insider selling exceeding $500 million and an 83x trailing earnings valuation. Operational metrics showed record sales, yet skepticism persisted.
Read at 24/7 Wall St.
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