Becker Private Equity & Business Podcast
Carvana – Do You Believe Their Financial Statements? 2-22-25
Sat, 22 Feb 2025
In this episode, Scott Becker discusses Carvana’s recent stock decline and questions the company’s financial transparency, comparing its earnings management tactics to past corporate strategies.
Chapter 1: What is the main topic of this episode?
Chapter 2: Why is Carvana's stock declining?
Chapter 3: What are the concerns about Carvana's financial transparency?
This is Scott Becker with the Becker Private Equity and Business Podcast. We often talk about companies that use smoke and mirrors to deliver their results. And one of those companies, in my perspective, is largely Carvana, the car company. Now, they're down about 15%. This last week, they were up crazily the last couple of years after some scandals years ago.
Chapter 4: How does Carvana manage its earnings reports?
And one of the things that you get with Carvana is this constant effort to say, our profits are this, our income is this. It reminds me almost, and I hate to use this name in vain because I'm a huge fan of Jack Welch, who used to manage his earnings reports. And Carvana seems to pull lots of different levels to manage their earnings reports.
One of the things that we're finding is the street is getting less excited about this management and thus much more aggressive about pricing what they think is real versus Memrex. So that's one of the things we're watching today is Carvana down again today for the second day in a row by a big amount, down 15% for the week.
We'll see if that lasts, but I find it absolutely fascinating to watch what's going on with Carvana. And I do believe they're one of the leaders in this concept of essentially playing smoke and mirrors with how they describe their earnings and what's going on with them. So again, that's Carvana, again, down now this week, but up year to date.
Thank you for listening to the Becker Private Equity and Business Podcast. Thank you very, very much.