(Bloomberg) — Short sellers at Carvana Co. just hit a grim milestone: more than $1 billion in losses this year.
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A hot streak for the struggling used-car dealership has only caused problems for bearish investors, with Carvana rallying 411% so far in 2023. $1.04 billion in market value losses for the year, according to data from S3 Partners.
“Shorting Carvana has not been a profitable trade this year and today’s price movement has made it an even worse trade,” said Ihor Dusaniwsky, Head of Predictive Analytics at S3, in an interview. Prior to Thursday’s rally, the shorts were already down about $600 million in year-to-date losses.
The day’s trading volume was more than 10 times the daily three-month average, according to data compiled by Bloomberg. But, only part of that “can be attributed to short coverage due to a painful short squeeze,” Dusaniwsky said. The majority of trades were long investors buying the shares, he added.
Shares of the online car dealership soared 56% on Thursday to close at $24.23 after the company said its operations improved in the second quarter. This remains far from the all-time high of $370.10 reached in August 2021.
Read more: Carvana shares soar on expectations of better financial results
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