Carvana under fire: Is it the 'Cockroach' Jamie Dimon just warned investors about?

"First Brands", 'Tricolor', "Zions Bancorporation", and "Western Alliance" -- a clutch of bad loans at banks in recent weeks has shaken investor confidence in banking shares, which gyrated sharply late this week as unease mounted over credit risks that threatened to spill into the broader markets. Then came the most bizarre but iconic 'cockroach' analogy from JPMorgan CEO Jamie Dimon.

The markets have weathered a string of credit scares and surprise write-downs over the past two years, but sentiment took a particularly hard knock in recent days from auto bankruptcies and alleged fraud that resulted in losses at several banks. The latest scare came on Thursday when Zions Bancorporation disclosed losses tied to two commercial and industrial loans and Western Alliance said it had initiated a lawsuit alleging fraud by Cantor Group V, LLC. Cantor denies the allegations.

"My antenna goes up when things like that happen," Jamie Dimon, CEO of JPMorgan, said on the bank's quarterly earnings call Tuesday. "And I probably shouldn't say this, but when you see one cockroach, there are probably more."

So, is there any more cockroach? Online used car dealer 'Carvana' share price has gone up 70 per cent in 2025, and 1,780 per cent in past three years. The total assets of Carvana are worth $9.4 billion, liabilities amount to $7.2 billion. Total debt rose to $6.2 billion, along with debt-to-equity ratio 292 per cent, Yahoo Finance reported quoting 247wallst.

However, Carvana is listed in New York Stock Exchange (NYSE) but it too relies on high-risk loans like 'Tricolor', 247wallst reported.

The banking sector's exposure to two recent U.S. auto bankruptcies, at First Brands and Tricolor, has also rekindled concerns about lending standards more than two years after Silicon Valley Bank's failure triggered broader turmoil. Still, many played down any parallels with the regional banking crisis in 2023, which was marked by the failure of several mid-sized banks including Silicon Valley Bank.

FAQs

Q1. Who is JPMorgan CEO?
A1. JPMorgan CEO is Jamie Dimon.

Q2. Which organisations have gone for bankruptcies?
A2. The banking sector's exposure to two recent U.S. auto bankruptcies, at First Brands and Tricolor.