Carvana: Bridgecrest and the Undisclosed Transactions and Debts
- Gotham City Research LLC
- Jan 28
- 2 min read
Updated: Jan 29
GOTHAM CITY RESEARCH’S OPINIONS
CVNA 2023-2024 earnings are overstated by $1 billion+, and far more dependent on related parties than disclosed.
DriveTime’s leverage fuels CVNA Adj EBITDA. Without DriveTime credit, CVNA earnings collapse, and CVNA Adjusted EBITDA doesn’t cover its interest expense.
CVNA 2025 10K will be delayed, 2023/2024 10Ks restated, BLAST ABS restated, & Grant Thornton will resign as auditor.
CVNA and DriveTime creditors’ ability and willingness to fund this scheme will change once they realize that the ecosystem is more levered than publicly disclosed.
The following reverse pyramid depicts what we believe, along with the complex interplay between CVNA’s earnings and its related parties:
SUMMARY OF THE BASES OF OPINIONS
DriveTime burned over $1 billion in cash flow from operating activities, and Free cash flow, from 2023-2024.
DT generated over $1 billion in cash flow from financing activities via debt issuance, from 2023-2024.
DriveTime leverage in 2023/2024 sits at 20x-40x, far higher than historical levels (capped at 10.3x before 2023).
DriveTime’s ratio of adj EBITDA to interest expense = 0.5x-1.0x , for 2023-2024. Far lower than previous years.
DriveTime marked down its loan portfolio by $900m while CVNA recognized gain on Loan sales of $755m in 2024.
CNVA 10K ’24 claims it has and may sell loans to DriveTime, but the DriveTime AR does not confirm this claim. Neither CVNA nor DriveTime disclose when nor how much.
We have uncovered dozens of loans tied to cars that CVNA sold, that appear on Bridgecrest balance sheet and VinAudit reports.
Bridgecrest is listed as the originator yet both DriveTime and Carvana filings don’t disclose Bridgecrest as originator.
CVNA claims Bridgecrest is a third party servicer, but BAC is fully owned by Ernie Garcia II.
We estimate Bridgecrest earns a very low servicing fee of 0.117% per year on loans sold by CVNA to “Third parties”
We believe CVNA sells loans to “third parties” at inflated rates (booking Gain on Sales). in exchange BridgeCrest charges these “third parties” with very low servicing fees.
GoFi LLC is fully owned by Garcia II. Like DT, GoFi burned cash in 2023 and 2024. GoFi revenues are GoS from DriveTime, and its expenses are payments to DriveTime.
GoFi and Carvana share the same mailing address.
We have detected accounting irregularities in sales commissions and servicing reported figures.
Carvana, DriveTime/Bridgecrest, GoFi all share the same auditor, Grant Thornton. Same auditor as Tricolor.
Gotham City Research Carvana Full Report:
DriveTime 2024 Annual Report - obtained via Freedom of Information Act:
GoFi LLC 2024 Annual Report - obtained via Freedom of Information Act
Gotham City Research - Carvana Supplemental Materials
This piece cuts straight through the fog. If the Bridgecrest / DriveTime links are even half as tight as laid out here, then the “third party” story starts looking less like disclosure and more like accounting theatre. Investors don’t need more glossy EBITDA adjustments — they need to know who is really carrying the risk.
Side note: for anyone digging through calls, interviews, or long audio notes on this, WhisperWeb is useful for turning speech into text directly in the browser, without uploading the audio.
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