Hindenburg Snipes Cabana, an American Used Car Company..."Improving performance is a mirage".

Hedge fund Hindenburg Research, which specializes in short selling, has published a report claiming that the stock rebound over the past two years by U.S. online used car dealer Kavanagh is a "miracle."

Hindenburg made the comments, pointing to inappropriate practices related to Carvana's car mortgage, business issues between Carvana CEO and family, and holding short positions betting on the stock falling.

Cabana is an online used car trader that has raised its profile as an "automobile vending machine," and its stock price has soared 42 times in the last two years as its performance deteriorates and its stock price has plunged before improving rapidly.

Hindenburg said in insider interviews and other interviews that Kavanagh has been dealing with unknown related parties, which has sold loans worth 1.2 trillion won in our money.

It also claimed that it temporarily inflated earnings through fraudulent accounting and relaxed loan screening, and that insiders sold off billions of dollars worth of shares while its share price soared through improved earnings.

It then pointed out that Kavanagh has avoided rising delinquency rates through extended auto mortgage maturities by its affiliates, which have seen Kavanagh shares fall about 2% from the previous session due to the Hindenburg report.