Carvana's stock price drops before earnings release as legal issues continue to escalate

LootboxPhobia · 2026-02-11T17:24:41+00:00

Carvana Co stock price fell 10% on Wednesday as investors grew nervous about the upcoming earnings report and legal challenges. Criticisms from short-selling firms and a court order reviewing the DriveTime attachment unsettled the market, causing stock price fluctuations.

LootboxPhobia

2026-02-11 17:24:41

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Investing.com – On Wednesday, online used car retailer Carvana Co (NYSE:CVNA) stock fell 10%, as investors appeared to be nervous about the company’s upcoming earnings report and ongoing legal challenges.

The decline occurred as the company faces increasing pressure from short sellers and legal issues. Carvana is scheduled to release its quarterly earnings next week, which may be one of the reasons for investor anxiety.

Last month, short seller Gotham City Research published a critical report accusing the company of accounting irregularities and undisclosed related-party transactions. The report specifically highlighted Carvana’s relationship with DriveTime, which is controlled by CEO Ernie Garcia II’s father.

Adding to investor concerns, a recent court ruling in an ongoing case approved a motion by the plaintiff. Judge Boyle ordered that Garcia Sr. must produce DriveTime attachments previously withheld in the discovery process, with access limited to attorneys only.

While the exact catalyst for Wednesday’s stock decline remains unclear, the upcoming earnings report and ongoing legal scrutiny seem to be affecting investor sentiment.

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