Carvana’s 10,000% Rally Deals $70-B Blow to Shorts

Carvana Co.’s shares hit an all-time high this week — rising more than 10,000% from their late-2022 low — delivering a staggering blow to investors betting against the online used-car dealer, Jordan Fitzgerald reported for Bloomberg News.

Short sellers betting against Carvana have suffered an estimated $7.42 billion in mark-to-market losses since the end of 2022. (Photo: Business Wire)

The surge caps a roller-coaster ride for the stock, which became a market darling after its 2017 public debut but has since faced criticism, including claims of overvaluation and allegations of lax business practices.

The latest rally was fueled by blockbuster second-quarter results released recently, boosting expectations that a turnaround is taking hold at the once-embattled company.

As a result, short sellers betting against Carvana have suffered an estimated $7.42 billion in mark-to-market losses since the end of 2022, according to calculations from S3 Partners.

Currently, about 10% of the company’s free float is held short—down sharply from 55% on December 27, 2022, when the stock hit its lowest point.

“This rally from the lows has turned Carvana into one of the most spectacular recoveries in modern market history—and a brutal reminder of how dangerous shorting stocks like this can be,” said Dave Mazza, CEO of Roundhill Financial.