Carvana's Upbeat Forecast and Q2 Profit Expectations Send Shares Soaring.
Carvana's shares surged by 55% after the online used-car retailer announced a surprise second-quarter profit forecast, catching bearish investors off guard. The company struggled to sell used cars purchased at higher prices during the pandemic due to weak demand over affordability concerns. Short positions in Carvana were at $488 million, with short sellers estimated to have lost $142 million since the stock started trading higher in after-hours trading on Thursday. However, analysts remain cautious about the stock's solvency concerns and the challenging used car supply environment in the medium-term.