Carvana is a highly levered ecosystem masquerading as a turnaround story, with earnings dependent on undisclosed related-party subsidies from DriveTime.
Via FOIA, we obtained DriveTime's 2024 Annual Report revealing $1B+ cash burn, 20-40x leverage, and $900M loan markdowns — all while CVNA booked record profits. We believe DriveTime's pain is Carvana's gain.
DriveTime Cash Burn
DT burned $1B+ in cash 2023-2024, exactly when CVNA turned cash-flow positive for the first time.
Historic Leverage
DT leverage surged to 20-40x vs historical cap of 10.3x. EBITDA doesn't cover interest expense.
$900M Loan Markdown
Bridgecrest instantly marked $5.9B loan book down 15% while CVNA booked $755M gain on sales.
Garcia Extraction
Garcia II extracted $352M from DriveTime while it burned cash — funded by debt issuance, not contributions.
Disclosure Failures
CVNA 10-K and DriveTime AR contain accounting irregularities and conflicting related-party figures.
Circular Transactions
GoFi/Bridgecrest originate loans for CVNA-sold cars, undisclosed in filings. Evidence of loan dumping.