(Adds details from report in paragraph 2, background in paragraphs 4,5)
June 12 (Reuters) - Kerrisdale Capital has taken a short position in shares of used-car retailer Carvana Co, the investment management firm said on Monday, adding the company will never generate sustainable positive cash flow until its debt is equitized.
"Liquidity will drain further and Carvana will be staring at over $250 million in interest payments in the fourth quarter, its seasonally slowest period," the fund said.
Carvana did not immediately respond to a Reuters request for comment.
On Friday, Carvana shares fell 11% as analysts suspected the upbeat profit forecast for the second quarter was a "one-time" upside.
The debt-laden company has struggled to sell cars that it bought at inflated rates during the pandemic.
Shares of the company were up about 8.5% in early trading as investors shrugged off the report.
(Reporting by Nathan Gomes in Bengaluru; Editing by Shweta Agarwal)
