Block & Leviton Investigates Carvana for Potential Securities Violations
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 28 2026
0mins
Should l Buy CVNA?
Source: Newsfilter
- Stock Price Plunge: Carvana's shares fell over 15% on January 28, primarily due to a Gotham City Research report alleging that its profitability relies on undisclosed related-party transactions, undermining investor confidence.
- Financial Manipulation Allegations: The report claims that DriveTime burned over $1 billion in cash while leveraging 20x to 40x EBITDA to subsidize Carvana's earnings, potentially raising serious questions about Carvana's financial health.
- Legal Investigation Initiated: Block & Leviton is investigating whether Carvana violated securities laws and plans to file actions to recover losses for affected investors, demonstrating a commitment to protecting investor rights.
- Whistleblower Reward Program: Block & Leviton encourages whistleblowers with non-public information to assist in the investigation, with potential rewards of up to 30% of any successful recovery from the SEC, further incentivizing participation.
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Analyst Views on CVNA
Wall Street analysts forecast CVNA stock price to rise
18 Analyst Rating
16 Buy
2 Hold
0 Sell
Strong Buy
Current: 361.530
Low
395.00
Averages
497.94
High
550.00
Current: 361.530
Low
395.00
Averages
497.94
High
550.00
About CVNA
Carvana Co. is a holding company. The Company operates an e-commerce platform for buying and selling used cars. The Company primarily acquires used vehicle inventory directly from customers, used car auctions, and wholesale used vehicle suppliers, including retail marketplace partners. Once it acquires a vehicle, the Company leverages its in-house logistics network or a vendor to transport the vehicle to one of its inspection and reconditioning centers (IRC) or auction locations with reconditioning capabilities, at which point the vehicle enters its inventory management system. It offers a mobile-optimized Website, where prospective retail car buyers can immediately begin browsing, researching, filtering, and identifying their vehicle of choice, where it offers an annotated virtual vehicle tour, which includes a 360-degree view of the interior and exterior of the actual vehicle. The Company also offers integrated financing using its loan origination platform.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
CARVANA STOCK DROPS 6% FOLLOWING Q4 PROFIT DISAPPOINTMENT
- Company Performance: Carvana shares have fallen by 6% following the announcement of a profit miss in the fourth quarter.
- Market Reaction: The decline in share value reflects investor concerns over the company's financial performance and future outlook.
See More
Carvana Shares Drop 21% Following Disappointing Earnings Report
- Carvana's Stock Performance: Shares of Carvana fell significantly in after-hours trading following the release of their quarterly results.
- Quarterly Results Overview: The company's financial report showed mixed results, contributing to the decline in stock value.
See More
Carvana Q4 Earnings Exceed Expectations with Strong Growth Metrics
- Net Income Surge: Carvana reported a Q4 net income of $951 million, reflecting a 58% year-over-year increase and surpassing market expectations by $340 million, indicating robust performance in retail unit sales and Adjusted EBITDA.
- Adjusted EBITDA Metrics: The company achieved an Adjusted EBITDA of $511 million with a margin of 9.1%, demonstrating significant progress in operational efficiency and profitability, thereby enhancing its competitive position in the market.
- 2025 Strategic Goals: Carvana is focused on three key objectives for 2025: substantial growth in retail units and Adjusted EBITDA, fundamental improvements in unit economics and customer experience, and the development of foundational capabilities to support sustainable growth.
- Future Outlook: Looking ahead to 2026, Carvana anticipates continued significant growth in both retail units sold and Adjusted EBITDA, particularly in Q1 2026, assuming stable market conditions, which will further solidify its leadership in the industry.
See More
Market Volatility and Investment Strategy Analysis
- Market Volatility: The S&P 500 fell on Thursday as tensions between the U.S. and Iran escalated, indicating that investors may be reducing equity exposure ahead of the weekend, reflecting concerns over geopolitical uncertainty.
- CrowdStrike Performance: Despite the broader market weakness, CrowdStrike's stock rose about 1%, although it remains down approximately 10% year-to-date; Jim Cramer believes that the increasing security risks associated with AI adoption will drive business growth, making it a top buy.
- Texas Roadhouse Earnings: Texas Roadhouse is set to report quarterly earnings after the bell, with expectations for strong same-store sales; however, Jim is concerned about declining margins due to beef inflation, with management guiding for a 7% commodity inflation rate in 2026.
- Boeing Order Situation: Boeing's stock fell nearly 1% despite signing a deal worth over $30 billion to sell around 100 aircraft to Vietnamese carriers, yet Jim remains steadfast in his confidence in Boeing's turnaround plan under CEO Kelly Ortberg's leadership.
See More
Significant Stock Movements Among Multiple Companies
- Klarna Guidance Miss: Klarna's shares plummeted about 25% as its first-quarter operating income guidance of $5 million to $35 million fell significantly short of Wall Street's expectation of $61.9 million, indicating potential challenges in future financing capabilities.
- Blue Owl Loan Sale: Blue Owl Capital's stock dropped nearly 10% after announcing the sale of $1.4 billion in loans at 99.7% of par value, with proceeds aimed at debt repayment and capital return, highlighting liquidity pressures and a halt on redemptions for retail investors.
- Omnicom Buyback Plan: Omnicom's shares surged 13% after reporting fourth-quarter revenue of $5.5 billion, a nearly 28% year-over-year increase, alongside a $5 billion share buyback authorization, reflecting strong financial performance and confidence in future growth.
- Deere Earnings Beat: Deere's stock rose 13% as it reported first-quarter earnings of $2.42 per share on $8 billion in revenue, both exceeding analyst expectations, indicating robust demand for agricultural equipment and potential market share growth ahead.
See More
Block & Leviton Investigates Carvana for Potential Securities Violations
- Investigation Background: Block & Leviton is investigating Carvana Co. for potential securities law violations after its shares fell over 20% on January 28, indicating increasing investor concerns about the company's financial transparency.
- Profitability Concerns: A report from Gotham City Research alleges that Carvana's reported profitability relies on undisclosed related-party transactions with DriveTime and Bridgecrest, with DriveTime reportedly burning over $1 billion in cash, leading to diminished market confidence in Carvana's financial health.
- Investor Rights: Any investor who purchased Carvana common stock and has incurred losses may be eligible for assistance from Block & Leviton, highlighting the firm's commitment to protecting investor rights and recovering losses.
- Whistleblower Incentives: Block & Leviton encourages whistleblowers with non-public information to assist in the investigation, with potential rewards of up to 30% of any successful recovery from the SEC, further incentivizing participation from potential informants.
See More
CARVANA STOCK DROPS 6% FOLLOWING Q4 PROFIT DISAPPOINTMENT
- Company Performance: Carvana shares have fallen by 6% following the announcement of a profit miss in the fourth quarter.
- Market Reaction: The decline in share value reflects investor concerns over the company's financial performance and future outlook.
See More
Carvana Shares Drop 21% Following Disappointing Earnings Report
- Carvana's Stock Performance: Shares of Carvana fell significantly in after-hours trading following the release of their quarterly results.
- Quarterly Results Overview: The company's financial report showed mixed results, contributing to the decline in stock value.
See More
Carvana Q4 Earnings Exceed Expectations with Strong Growth Metrics
- Net Income Surge: Carvana reported a Q4 net income of $951 million, reflecting a 58% year-over-year increase and surpassing market expectations by $340 million, indicating robust performance in retail unit sales and Adjusted EBITDA.
- Adjusted EBITDA Metrics: The company achieved an Adjusted EBITDA of $511 million with a margin of 9.1%, demonstrating significant progress in operational efficiency and profitability, thereby enhancing its competitive position in the market.
- 2025 Strategic Goals: Carvana is focused on three key objectives for 2025: substantial growth in retail units and Adjusted EBITDA, fundamental improvements in unit economics and customer experience, and the development of foundational capabilities to support sustainable growth.
- Future Outlook: Looking ahead to 2026, Carvana anticipates continued significant growth in both retail units sold and Adjusted EBITDA, particularly in Q1 2026, assuming stable market conditions, which will further solidify its leadership in the industry.
See More
Market Volatility and Investment Strategy Analysis
- Market Volatility: The S&P 500 fell on Thursday as tensions between the U.S. and Iran escalated, indicating that investors may be reducing equity exposure ahead of the weekend, reflecting concerns over geopolitical uncertainty.
- CrowdStrike Performance: Despite the broader market weakness, CrowdStrike's stock rose about 1%, although it remains down approximately 10% year-to-date; Jim Cramer believes that the increasing security risks associated with AI adoption will drive business growth, making it a top buy.
- Texas Roadhouse Earnings: Texas Roadhouse is set to report quarterly earnings after the bell, with expectations for strong same-store sales; however, Jim is concerned about declining margins due to beef inflation, with management guiding for a 7% commodity inflation rate in 2026.
- Boeing Order Situation: Boeing's stock fell nearly 1% despite signing a deal worth over $30 billion to sell around 100 aircraft to Vietnamese carriers, yet Jim remains steadfast in his confidence in Boeing's turnaround plan under CEO Kelly Ortberg's leadership.
See More
Significant Stock Movements Among Multiple Companies
- Klarna Guidance Miss: Klarna's shares plummeted about 25% as its first-quarter operating income guidance of $5 million to $35 million fell significantly short of Wall Street's expectation of $61.9 million, indicating potential challenges in future financing capabilities.
- Blue Owl Loan Sale: Blue Owl Capital's stock dropped nearly 10% after announcing the sale of $1.4 billion in loans at 99.7% of par value, with proceeds aimed at debt repayment and capital return, highlighting liquidity pressures and a halt on redemptions for retail investors.
- Omnicom Buyback Plan: Omnicom's shares surged 13% after reporting fourth-quarter revenue of $5.5 billion, a nearly 28% year-over-year increase, alongside a $5 billion share buyback authorization, reflecting strong financial performance and confidence in future growth.
- Deere Earnings Beat: Deere's stock rose 13% as it reported first-quarter earnings of $2.42 per share on $8 billion in revenue, both exceeding analyst expectations, indicating robust demand for agricultural equipment and potential market share growth ahead.
See More
Block & Leviton Investigates Carvana for Potential Securities Violations
- Investigation Background: Block & Leviton is investigating Carvana Co. for potential securities law violations after its shares fell over 20% on January 28, indicating increasing investor concerns about the company's financial transparency.
- Profitability Concerns: A report from Gotham City Research alleges that Carvana's reported profitability relies on undisclosed related-party transactions with DriveTime and Bridgecrest, with DriveTime reportedly burning over $1 billion in cash, leading to diminished market confidence in Carvana's financial health.
- Investor Rights: Any investor who purchased Carvana common stock and has incurred losses may be eligible for assistance from Block & Leviton, highlighting the firm's commitment to protecting investor rights and recovering losses.
- Whistleblower Incentives: Block & Leviton encourages whistleblowers with non-public information to assist in the investigation, with potential rewards of up to 30% of any successful recovery from the SEC, further incentivizing participation from potential informants.
See More
