Why Carvana Shares Popped 15% Wednesday
Shares of Carvana (NYSE: CVNA), an online car buying and financing platform also known for its giant car vending machines, were surging 15% higher Wednesday with no direct news about the company. Here's why a short squeeze could be happening.
Carvana has been an intriguing company from the get-go, and its soaring stock has made it even more interesting. It's up 881% in just under three years as a publicly traded company. While that's made many investors happy, it's also brought out plenty of short interest.
When short-sellers borrow and then sell a company's stock at what they believe to be an overvalued price, they're required to buy those shares back later. If the short-sellers later believe they made a mistake as the stock they shorted continues to rise, they could buy the shares back in a panic to avoid further losses.
Source Fool.com
