The shares of CVNA of Carvana Co remain volatile Tuesday after surging higher to start the week amid increased short squeeze chatter. Recent volatility could be added to by the fact that Carvana is heavily shorted. According to data from Benzinga Pro and Fintel, short interest is in a range of 65% to 85%.
Carvana shares crumbled last year due to bankruptcy concerns. The stock fell alongside used vehicle prices for a majority of the year 2022. The Manheim Used Vehicle Index says that the declines in the used car market were the biggest drawdown since 2008, according to the Manheim Used Vehicle Index.
Carvana is being highlighted by traders on social platforms as a potential short-squeeze candidate. Carvana is one of the five most mentioned stocks on the Reddit's r Wallstreetbets over the last 24 hours and is one of the top two trending tickers on Stocktwits at last check.
According to a report from Monday, Carvana shares traded higher amid the optimism that used car prices may have finished moving lower.
According to an interview with Fox Business, Adam Kobeissi founded The Kobeissi LetterKobeissi Letter founder Adam Kobeissi said that the stock's narrative has shifted from worries about bankruptcy to hopes that the used car market has bottomed out. As consumers are looking to cut spending in the wake of inflation, used cars remain an incredibly hot market, given the record price of new cars, according to Kobeissi.
Carvana is expected to report its fourth quarter financial results on February 23. In the same quarter last year, Carvana reported a net loss of $1.02 per share on quarterly revenue of $3.753 billion, according to Benzinga Pro.
CVNA Price Action: Carvana shares are down more than 94% over a one-year period, despite surging more than 100% this month.
The stock went higher in Tuesday's premarket session before pulling back and turning negative. Carvana shares are down 2.1% at $9.79 at the time of publication.