Markets
markets
Max Knoblauch

Carvana tumbles on report from short seller Gotham City Research

Used car retailer Carvana is down more than 16% on Wednesday, with shares on pace for their worst day since April.

A new report from short seller Gotham City Research, which had teased its publication in a post on X earlier in the day, appears to be dragging shares down. In the report, Gotham alleges Carvana’s 2023-24 earnings were overstated by more than $1 billion. (For perspective, Carvana’s earnings in those two years totaled just over $550 million.)

Gotham’s report also alleges that Carvana’s earnings are “far more dependent” on auto loan companies DriveTime and Bridgecrest than the market currently takes into account and that DriveTime’s subsidies fuel over 73% of Carvana’s earnings before interest and taxes. In its post teasing its findings, Gotham said Carvana would “age as one of the biggest Corporate Scandals of America over time.”

Per the report:

“We see problems with accounting, disclosure, and business practices that will lead to regulatory trouble. At best, we believe CVNA is far less profitable than believed, as a standalone business. At worst, CVNA is more like Tricolor, rather than Amazon. Either way, shares face massive downside risk to the share price.”

Carvana did not immediately respond to a request for comment.

More Markets

See all Markets
markets
Matt Phillips

ServiceNow slips despite beating Q4 earnings expectations

Cloud software giant ServiceNow delivered better-than-expected Q4 sales and earnings after the close of trading on Wednesday, though the shares slipped in after-hours trading.  

The company reported:

  • Revenue of $3.57 billion, higher than the $3.53 billion analyst consensus estimate published by FactSet.

  • Adjusted earnings of $0.92 per share vs. the $0.88 analysts expected.

  • Subscription revenue of $3.47 billion vs. the $3.42 billion predicted.

  • Raised guidance for Q1 subscription revenues of between $3.65 billion and 3.655 billion, compared to the $3.58 billion FactSet consensus estimate.

  • Non-GAAP gross margins of 80.5%, a little light compared to the 81.1% FactSet consensus estimate. 

Despite the better-than-expected results, the stock was down after-hours. ServiceNow also announced an expanded AI partnership with Anthropic, in which it will enmesh Anthropic’s Claude models more deeply into its products, alongside its financial results.

Such efforts to more closely associate itself with the AI boom have fizzled so far. ServiceNow shares have plunged 45% over the last year. And investors clearly remain skeptical after the Q4 numbers.

IBM Q3 Earnings Numbers

IBM beats Q4 earnings expectations, stock rises

Here’s what big blue reported.

Matt Phillips4h
markets
Max Knoblauch

Southwest climbs on stronger-than-expected 2026 earnings guidance

Southwest Airlines posted its fourth-quarter and full-year earnings after the bell on Wednesday. Its shares climbed more than 4% in after-hours trading.

The airline, one of the big four US carriers, guided for revenue per seat mile to climb “at least 9.5%” in the first quarter, and costs per seat mile to rise 3.5%. It forecast a 1% to 2% boost in capacity for Q1.

For the full year ahead, Southwest said it expects adjusted earnings of $4 per share, ahead of Wall Street estimates of $3.22.

The carrier, which flew its last open-seating flight on Tuesday, posted Q4 adjusted earnings of $0.58 per share, slightly above the $0.57 per share expected by Wall Street analysts polled by FactSet. Southwest’s passenger revenue rose 7.6% to $6.79 billion in the fourth quarter, beating estimates of $6.77 billion.

Rani Molla
4h
Tesla beats on EPS and revenue, says it has invested $2 billion into xAI

Tesla reported Full Self-Driving subscription numbers and a list of cities where it says Robotaxi is expanding in the first half of 2026.

Elon Musk addresses World Economic Forum
Tasha Matsumoto, Luke Kawa
5h
Stocks waver as all eyes are on Big Tech earnings

The S&P 500 finished flat as investors awaited tonight’s postmarket earnings from Meta, Microsoft, and Tesla.

BISHOP'S STORTFORD, ENGLAND - JANUARY 25: Snowfall in the Essex countryside on January 25, 2021 in Bishop's Stortford, Essex, United Kingdom.

Latest Stories

Sherwood Media, LLC produces fresh and unique perspectives on topical financial news and is a fully owned subsidiary of Robinhood Markets, Inc., and any views expressed here do not necessarily reflect the views of any other Robinhood affiliate, including Robinhood Markets, Inc., Robinhood Financial LLC, Robinhood Securities, LLC, Robinhood Crypto, LLC, or Robinhood Money, LLC.
©2026 Sherwood Media, LLC