Shares of online used-car dealer Carvana Co. recovered some losses from a two-day selloff, after a report showed billionaire Mark Walter’s stake in the company was pledged, meaning he wouldn’t be able to immediately sell it as he contends with a federal probe of his investment empire.
Carvana shares climbed as much as 8.1% Wednesday, after dropping 14% over the past two sessions. Investor sentiment got a boost after a report from Hunterbrook Media on Tuesday said Walter has pledged his stake to Citigroup Inc., citing regulatory filings. Walter did not immediately respond to Bloomberg’s requests for comment about whether that agreement was still in place.
“It appears short covering has commenced in Carvana after Hunterbrook Media reported last night that Walter’s Carvana stake is already pledged as collateral to Citigroup,” said Michael O’Rourke, chief market strategist at JonesTrading. About 10% of Carvana’s free float is held short, according to data from S3 Partners.
A regulatory filing from June 2025 show that Walter and his holding company TWG Global’s stake in Carvana held through CVAN Holdings LLC were pledged to a third party as collateral to secure derivative positions and margin loans. Citigroup did not immediately reply to a request for comment.
The recent stock decline “was due to a supply issue, not a fundamental one,” said Matt Maley, chief market strategist at Miller Tabak + Co. “So, the fact that this report relieves those concerns for now, it makes sense that the stock is bouncing back nicely.”
Walter, the 66-year-old chief executive officer of Guggenheim Partners and TWG Global, held about 30 million Carvana shares, or a roughly 4% stake in the company, through CVAN Holdings, according to data compiled by Bloomberg. Walter is rapidly reshaping his $18 billion fortune as he contends with the federal probe, agreeing last week to sell the Los Angeles Lakers at a record valuation.
Written by: Georgie McKay @Bloomberg
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