Carvana shares are under pressure this week as Mark Walter probe fuels investor jitters

Carvana shares are headed for about a 7% weekly loss as a federal investigation into billionaire Mark Walter shines a spotlight on his minority stake in the online used-car retailer.

The stock dropped more than 7% on Tuesday, one day after a similar-sized decline on Monday. The shares rebounded 8% Wednesday.

The pressure came after The Wall Street Journal reported that federal prosecutors and the Securities and Exchange Commission are investigating Walter and businesses tied to his financial empire over whether financial relationships were concealed while more than $20 billion was routed through insurance companies he controls.

Walter’s connection to Carvana is significant. He indirectly controls CVAN Holdings LLC, which owned 8% of the company’s Class B common stock as of March 10, according to Carvana’s proxy statement.

Insider selling this week could have also contributed to the share price weakness. One Carvana director disclosed the sale of 30,000 shares at prices around $74. The transactions generated roughly $2.1 million in proceeds, according to a regulatory filing, and involved the exercise of stock options that were set to expire in 2027.

Under the radar

Walter, the chief executive officer of Guggenheim Partners, the owner of the Los Angeles Dodgers and controlling owner of the LA Lakers, has agreed to sell the basketball franchise for $12.5 billion amid the federal probe. The scrutiny raised questions about what could happen to his Carvana position if fallout from the investigation pressures him to raise cash.

Carvana disclosed in its March proxy that a private consumer products company issued Carvana a warrant in June 2025 to purchase shares of its common stock. Carvana valued the warrant at $1.5 million as of the end of 2025, with tranches vesting through 2029 based on performance goals. The company said Walter “has a substantial ownership interest in the warrant issuer.”

Investor and SubStack writer Herb Greenberg said that relationship had attracted little attention before the investigation thrust Walter’s financial dealings into the spotlight.

“That’s been out there and because it’s already been disclosed, it fell under the radar oddly and nobody paid attention,” Greenberg said. “What happens when he has to sell and who’s going to buy it? Historically Carvana has always found a way to get out of these kind of jams.”

Carvana has faced several controversies over the years, including short seller accusations and regulatory penalties.

Officials at Tempe, Arizona-based Carvana weren’t immediately available for comment.