Fun and Games with EBITDA

When credit markets seized up during the February-March market panic, CVNA shares crashed due to its inability to produce used car loans at a sustainable level. In a very capital-intensive business, having enough cash flow is key. Using one accounting metric in a misleading way is necessary to constantly reinforce a narrative of unlimited demand for cars to maintain excitement in the stock.

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Dan Amoss

Dan Amoss, CFA, tracks aggressive accounting and other red flags that markets miss. He’s a student of the Austrian School of economics and Daily Reckoning fan since 2000. Agora Financial relies on Dan for macro market commentary as well as profitable plays like his 2008 call to readers to buy Lehman Bros. puts, which...

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