Hindenburg Shorts Carvana, Alleging ‘Grift for the Ages’ (1)

Carvana Co. was accused by prominent short-seller Hindenburg Research of impropriety in a report alleging that the auto retailer’s subprime loan portfolio carries substantial risk and its growth is unsustainable.

Hindenburg took a short position on Carvana’s stock after conducting research that included interviewing former employees. The report, titled: “Carvana: A Father-Son Accounting Grift for the Ages,” makes several claims, including that Carvana has lax underwriting standards and uses a company owned by the father of Chief Executive Officer Ernest Garcia III to boost results.

Carvana’s shares declined 1.9% at the close in New York. The stock surged 284% last ...