PR & News Make It or Break It for Carvana??

[Jeff Kershner]

Carvana stock has decreased 97% in value so far in 2022

Oppenheimer analyst Brian Nagel wrote, “significant nearer-term operational and financial risks for Carvana have emerged and are likely to cloud the CVNA investment story for the foreseeable future.” The analyst said Carvana will likely need more than $6 billion in additional capital through 2025...

Carvana stock has decreased 97% in value so far in 2022

Online used-car retailer Carvana has seen its stock plummet from an all-time high of nearly $377 per share in August of 2021 to just $6.50 per share this week.

www.cbtnews.com

 

[Steve Stauning]

As to an earlier question in this string, Who will acquire them? The answer is most likely no one. There's far too much debt to make buying this pig before bankruptcy a good idea.

My belief is that bankruptcy has been the plan for at least the last 12-24 months. The bonds Apollo bought were most likely part of this, as these bondholders are senior to the creditors. The shareholders will get $0.

In bankruptcy, the Garcias can come back in with a few billion and buy the whole thing without debt. As a private company, they can shrink their footprint and sell vehicles only where they can scale. Of course, the Garcias could also decide they don't want any of it. They've already made billions selling stock near the highs, so unless there are substantial pieces of Carvana that can help the dad's DriveTime biz, they could also just pass on the whole thing.

 

[JonDoch]

The first pump and dump outside of crypto, however done with automotive. Sad for those who will lose jobs that could have been greenpeas at our stores, if you can even call it that.

I would imagine the squeeze of front end from competitors in similar business models such as echo park and others taking hold in more local markets might not soften the landing for them; the trend of covid remote buying fizzled out and I think we are seeing a combined effect of timing and shopper changes. Maybe they have a way out that I am not aware of.

 

[Jeff Kershner]

It's been awhile since we have discussed Carvana here in the forums. I believe this was one of the more recent discussions. There for awhile it looked as if Carvana was on Empty and burning fumes, however something happened and they were able to bounce back. Not only have they bounced back BUT they just acquired a few Stellantis dealerships, including locations in Arizona, Dallas, San Diego, and Atlanta.

This marks a strategic expansion into new-car retail to boost inventory, gain access to high-quality off-lease vehicles, and test the franchise model, with CEO Ernie Garcia calling it an early "experiment".

@Greg Spencer , (journalist thats been in and our of the forums over the last few years) is curious to what dealers may be thinking about this acquisition... What do other dealers think about this? Is it a worrying trend? What measures are you taking to compete against Carvana should they enter your market? Or are you happy to have another potential buyer for your operations

We can share your feedback here or over on the separate thread he started.