Lifting the Veil on Wall Street: Carvana and Hertz's Strategic Tesla Maneuver

Here's the essence of the scheme: Hertz, urgently needing liquidity, has heavily written down its fleet of 30,000 Tesla vehicles and is selling them 100% on Carvana's platform. At the same time, it has used social media to create momentum, attracting a large number of Tesla/Musk fanatics, and then selling the Tesla cars at relatively high prices, earning much higher profits and profit margins than normal business operations.

This is why when I asked other second-hand car platforms, they had not heard of Hertz looking for a second-hand car sale, because it was completely operated in the dark, all sent to a single platform. Carvana secretly sold 10,000 vehicles in the first quarter, while using Vroom's leverage to create the illusion of profitability - all of which the management was well aware of, hence no one sold stocks, and one even bought more.

After the first quarter report, on the one hand, the illusion of profitability was created using Vroom's leverage, and on the other hand, the sales of Hertz's Tesla fleet created the illusion of taking market share against the trend, with the cooperation of several institutions in New York to jointly manipulate the market, causing the stock to soar by 40% after the market closed. We suffered losses on the short side in the first half of the year because we did not understand the dynamics behind this company.

Why has the stock price surged recently? Because Hertz announced that it will accelerate the sale of Tesla on the Carvana platform, giving these institutions another opportunity to squeeze shorts (although the proportion of short positions in the floating stock has decreased from 29% to 22%). I would still be very cautious about shorting at this position because there are still 20,000 Teslas that will be sold on the Carvana platform in the second and third quarters, and the profit margin of these cars will be very high - which is why the management was confident in the first quarter earnings call that our second quarter adjusted EBITDA rate will further improve.

These institutions set up the scheme, and Garcia is responsible for continuously selling his own shares every day, and from time to time, squeezing to attract WSB to follow in, worthy of a CEO with a felonious father.