It's easy to see why Carvana would attract the attention of a short-seller. The stock has surged since its bottom at the end of 2022, slashing costs through layoffs and refinancing, and returning the business to profitability after years of rapid but unprofitable growth and overextending itself with acquisitions.

Carvana stock more than tripled in 2024, extending a two-year bull run that's returned 4,000% amid a turnaround effort that has pulled the online used-car retailer from the brink of bankruptcy.

So what is happening with CVNA stock? Carvana posted its third straight net profit in Q3. Its earnings came at about $1.26 per share, a drop of 65% year-over-year (y-o-y), but that was still much better than had been feared.