On May 18, 2022, the Illinois Secretary of State’s office announced that Carvana’s license to sell vehicles in Illinois was suspended on May 10 due to the misuse of issuing out-of-state temporary registration permits and for failing to transfer titles. The Secretary of State’s office stated that vehicles that have already been purchased but not yet delivered can still be delivered to the purchasers during the suspension, but no new vehicle sales can occur in Illinois during the suspension order.

On this news, Carvana’s stock price fell $6.55 per share, or 15%, to close at $35.05 per share on May 18, 2022.

On June 24, 2022, after market hours, Barron’s published an article entitled “Carvana Sought to Disrupt Auto Sales. It Delivered Undriveable Cars.” The article detailed several alleged issues with the Company including stating “Barron’s interviews with Carvana customers and former employees shed light on why registrations were delayed and how state regulators have tried to address the issue. The reporting reveals a company scrambling to address the problem, at one point forming an ad hoc unit known as the ‘undriveable-car task force.’” The article also stated that “[i]n other instances, though, including Burton’s, Carvana sold cars before it had title to the vehicles, an action that is illegal in many states where the company does business.” The article further stated that “[i]nterviews with state officials and former Carvana employees show the issue is wider-reaching than the company suggests.”

On this news, Carvana’s stock price fell during intraday trading on June 27, 2022, the next trading day.