Reduced Holdings Alert Temporarily Lifted? Billionaire Walter Pledges Carvana (CVNA.US) Shares, Short Covering Drives Stock Price to Rebound Over 8%

According to Zhitong Finance APP, shares of online used car dealer Carvana Co. (CVNA.US) rebounded on Wednesday, closing up 8.4% at $70.43, recovering part of a 14% slump accumulated over the previous two trading days. Earlier reports indicated that billionaire Mark Walter’s Carvana shares had been pledged to Citigroup (C.US), meaning he could not sell them immediately, alleviating investor concerns about a possible large-scale sell-off.

On Tuesday, Hunterbrook Media cited regulatory filings reporting that Walter had pledged his Carvana shares to Citigroup. A regulatory document filed in June 2025 showed that the Carvana shares held by Walter and his holding company TWG Global via CVAN Holdings LLC had been pledged to a third party as collateral for derivative positions and margin loans.

Citigroup declined to comment; Walter and Carvana did not respond to requests for comment regarding whether the pledge agreement is still in effect.

Michael O’Rourke, Chief Market Strategist at JonesTrading, commented: “After Hunterbrook Media reported last night that Walter’s Carvana shares had been pledged to Citigroup as collateral, a short covering rally in Carvana seems to have begun.” According to S3 Partners data, about 10% of Carvana’s freely tradable shares are sold short.

Matt Maley, Chief Market Strategist at Miller Tabak + Co., said the recent drop in stock price “was driven by supply-side issues rather than fundamental problems,” “therefore, this report has temporarily alleviated those worries and the sharp rebound is reasonable.”

The report also showed that Walter holds about 30 million Carvana Class A shares through CVAN Holdings, accounting for about 4% of Class A shares; CVAN also holds about 30 million Carvana Class B shares, about 8% of Class B shares. According to Hunterbrook, Walter cannot easily sell these shares on the open market, at least not until Citigroup releases the pledge.

Walter Faces $7.6 Billion Funding Pressure in the Coming Months

However, hedge fund manager Eric Jackson further pointed out in a Substack article that Walter and his holding company TWG Global face funding commitments of up to approximately $7.6 billion over the next few months, adding new uncertainty to the outlook for one of the major shareholders of Carvana.

Specifically, Walter's TWG Global has committed up to $1.1 billion in funding for the acquisition of Clear Channel Outdoor, a deal expected to close by the end of September. Beyond this $1.1 billion commitment, another imminent $6.5 billion requirement involves Delaware Life. Walter’s holding company aims to transfer $6.5 billion of non-affiliated business assets to the insurance company in exchange for loans previously granted to affiliates by Delaware Life.

Jackson pointed out that Walter has consistently used his prime assets (including his stake in Guggenheim Partners and the Los Angeles Lakers) as loan collateral, with some investors earning double-digit interest rates. This indicates he prefers asset-backed financing rather than directly selling assets for cash.

“A company with ample liquidity typically does not issue one-year notes backed by core founder assets, with double-digit coupon rates and seizure rights attached. This only happens when time is tight and there are no other options.”

Jackson added that he is not suggesting Walter is insolvent or unable to pay. He is only emphasizing that billions of dollars in funding obligations will come due in a concentrated period, and some assets available for debt repayment may be locked in pending transactions or have already been used as collateral.

“The Clear Channel equity commitment and the Delaware Life asset swap are two separate obligations. I’m not suggesting that one is being used to pay for the other, nor do I think there is repayment risk with either. I am simply pointing out they will both hit the same balance sheet in the same quarter.”

It’s understood that Walter, now 66, is the CEO of Guggenheim Partners and TWG Global and owner of the Los Angeles Dodgers. According to compiled data, his net worth is about $18 billion. Against the backdrop of a federal probe into his investment empire, Walter is rapidly reshuffling assets: last week he agreed to sell his stake in the Los Angeles Lakers to Josh Kushner and Bob Iger at a record valuation of $12.5 billion; on Monday, it was also reported that he might sell his stake in Premier League club Chelsea.