Carvana (CVNA)

This is a high confidence position for us. We just sold some Apple to buy some more. My investment thesis is that this is video rentals all over again.

For you millennials out there, there once was this thing called the DVD, and before that the VHS. And you would go to a mom-and-pop store and rent one for a couple of nights.

Eventually some guy got an idea to create a super-store of videos. It was called Blockbuster. And you had way more titles than before. So Blockbuster killed the mom-and-pop video stores. And Blockbuster was unstoppable. Nobody could compete with it.

What happened to Blockbuster? They got whacked, twice, by Netflix and Redbox. What happened was that people started subscribing to Netflix. You had tens of thousands of movies you could watch, way more than you could find at any Blockbuster. And they would mail them to you in a red envelope. As for a new movie that you had to see right away, you could go to a Redbox and rent one. No physical location, very low costs. Blockbuster went out of business.

Okay, that’s the short history of renting a video. I mention it, because we are seeing the exact same war play out, except this time with a huge market–the purchase of a used car.

There remain a lot of mom-and-pop used car dealers. You go to a lot and look at their limited selection. Maybe you find a car you like okay, and you buy it. And I swear to God, the same guy who started Blockbuster, got the idea for a super-sized used car dealer. He called it AutoNation. He actually got beat out by another one, CarMax. But the idea was that you had a lot more selection at one of these giant dealers.

Well, both CarMax and AutoNation and all the mom-and-pop used car dealers are in the process of getting whacked by Carvana.

CarMax = Blockbuster
Carvana = Netflix

We know how this fight ends up. Carvana in a knockout. Why? Same reason Netflix dominated. You go to a website and you have tens of thousands of cars to choose from. You can get exactly the car you want. (Well, it’s not new, because you’re a poor millennial). But other than that, it’s the car you want. And they will either deliver the car to you, or you have the experience of watching one of their car towers operate.

One downside is that if you make a virtual purchase like that, you can’t test drive the car. The way Carvana works around that is that you can drive the car for a week, up to 400 miles, and return it if you don’t like it. That’s your test drive, the first week of ownership. Pretty amazing, yes?

Now let’s look at those growth rates…

2014: $37.9 million
2015: $53.8 million
2016: $85.7 million
2017: $131 million
2018: $144 miilion (first 3 quarters)

That’s right, they have a 50% plus revenue growth rate. In the used car industry. The used car industry is a massive, $7.8 trillion industry, in the U.S. alone. Last year that industry grew sales at 1.6 percent. And that was considered a wonderful year.

There will probably be a lot of winners in this revolution. But make no mistake–a lot of used car purchases will migrate to the internet. And a lot of used car lots will go out of business.

Carvana is the leader and top dog in this emerging industry. Every time they put up a car tower in a new city, people go, “who is that?” And the answer is, “a marketing genius.”

The last time I checked, Carvana was the #1 short position. 139% of its float is sold short. That makes me happy, actually, as all those people are future buyers. And there may or may not be a short squeeze at some point. Anyway, if volatility does not scare you, I would suggest Carvana for your research.

42 Likes

Thank you for the write up; I did in fact research this business last summer which is when I realised that the CEO’s dad who is the biggest shareholder has a shady past (convicted felon) -

https://www.forbes.com/sites/nathanvardi/2017/12/18/how-an-e…

Last year, I also wrote to Carvana’s IR Department (twice) and asked how the company plans to fund its growth (new towers and car refurbishing centres/warehouses do cost money); unfortunately, they simply ignored my emails and did not respond.

This business has first mover advantage, but the quality of the management/owners is questionable at best and their lack of transparency is a cause for concern.

When the IR Department didn’t respond to my pointed questions, I decided to close out my starter position.

Finally, it appears as though the car industry is in transition and over the next decade or so, autonomous vehicles, ride sharing, EVs etc may reduce car ownership and the need for people to have their own cars.

Who knows how this will all play out but because of the above reasons, I’m staying away from CVNA.

I do hope it works out for you though.

25 Likes

Feedback.

(1) First off, CVNA has definitely been a disruptor. But KMX is the 800lb gorilla ---- and will not be the disrupted in this space. CVNA has given a nice punch to KMX ---- but the 800lb gorilla of used has awoken. KMX announced this in December. They plan to roll this out nationwide in 15 months. KMX are strong executors. They will get this done and will not be disrupted.

(2) Have a look at the debt situation at CVNA. Debt to Equity ration of 7+. KMX’s debt is primarily for the their finance of vehicles. Strong balance sheet at KMX.

(3) I do think the future of car buying is fixed price/less negotiation, online research, online F&I, deliver to you, etc., But CVNA takes risk on the trade-in inspection that KMX doesn’t quite have to do. KMX can bring the trade to their local site and run through their inspection process. CVNA takes the trade back on their truck and relies on third party inspections. Haven’t seen their write-offs ---- but given the other thoughts I have re: their business model, I didn’t bother. Inspections in the used car industry are key ---- much more key than an Autocheck or CarFax…

(4) Carvana is still building brand and trust. CarMax already is known.

Just some initial thoughts. I held it for a short bit and when I saw that KMX is finally “all in”, I sold. Took a small loss and am happy to be out.

I should also say that I’m in the auto industry. No question, CVNA has done well. And no question the business on both retail and wholesale is moving online. There may be a spot for two retail/online winners. I just don’t think Carvana is the other winner…

12 Likes

Agree. Was going to write the same thing, but I felt much stronger re: my other points. Earnie Jr now runs the business and is a great guy.

when I realised that the CEO’s dad who is the biggest shareholder has a shady past (convicted felon)

Hopefully Bert will rec the company and then you can short it!

3 Likes

One more point which I forgot to mention in my previous post is that so far, the CEO’s dad has allowed Carvana to use his auto dealership company’s (DriveTime) facilities/car refurbishing centres for FREE; and this has artificially reduced Carvana’s costs.

In the real world, businesses have to incur costs to use facilities but this isn’t the case for Carvana - which is why its IR Department didn’t respond to my emails.

Best,

GM

2 Likes

SaintCroix,

No need to get touchy!

You posted the idea on the board; I gave you my feedback and showed you the red flags - if you want to ignore them, fine by me. And just because I am staying away from this stock doesn’t mean I have any intention of shorting it - I never short individual stocks.

As I mentioned in my previous post, I hope Carvana works out for you.

25 Likes

Forgot to post the link. https://www.businesswire.com/news/home/20181204005196/en/Car…

But KMX is the 800lb gorilla ---- and will not be the disrupted in this space. CVNA has given a nice punch to KMX ---- but the 800lb gorilla of used has awoken. KMX announced this in December. They plan to roll this out nationwide in 15 months. KMX are strong executors. They will get this done and will not be disrupted.

The Innovator’s Dilemma is a great book.

CarMax is stuck with a hell of a lot of real estate (and employees). They are now superfluous. These are costs that Carvana does not have.

Why did Blockbuster disappear?

The giant size is a disadvantage when the rules shift, and we are playing a different game. See also Malcolm Gladwell, David and Goliath

https://www.ted.com/talks/malcolm_gladwell_the_unheard_story…

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https://www.highya.com/carvana-reviews?page=9

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I never short individual stocks.

A little off-topic, but I think it’s wacky that the way to win in CAPS is to short stocks. It’s a design flaw in the game.

As I mentioned in my previous post, I hope Carvana works out for you.

Thanks. We are very bullish.

Good write-up at the Fool here:

https://www.fool.com/investing/2018/11/28/carvana-an-introdu…

Actually, this write-up is a little better.

https://www.fool.com/investing/2018/11/28/should-you-avoid-o…

And CVNA has a P/S ratio of 3. So if you’re looking at 50% top-line growth rates, at a cheap price, it’s hard to beat. You might see those numbers with tiny companies just starting out. But Carvana has already passed $1 billion in annual revenues. The TAM is astounding.

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PRice to sale of 3 with 50% growth and huge TAM. Do you really believe that Carvana is so under the radar that the stupid people on Wall Street have decided to price it with only a price to sale of 3, with those characteristics without a realllllllyyyyyyy good reason?

What is that reason, and why is that reason wrong?

Tinker

7 Likes

My interest was piqued when the ad said just take a picture and send us you license plate and we will buy your used car. I look back and the last cars I have sold and I think today’s young tech crowd will also find that appealing. For my last car sale, it checked the blue book values and compared to CarMax offer and felt I could do better. I made up signs, parked in dense area with demographics that might want to buy a used car and waited. I did do better than the CarMax offer, even including the $75 ticket for having a for sale sign in a publically parked car! But still, that can get old and if you are ready to buy, you are ready to sell, and CarGurus have an easy way to sell. I think they can make a nice profit on lazy people.

Pete

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I’m sure CVNA have a chance to build a business doing what they do, but gross margins of circa 10% aren’t something I can personally get excited about.

Cheers

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Why did Blockbuster disappear?
Actually what I heard was quite interesting. Apparently Netflix approached Blockbuster to be their online film rental play and Blockbuster told them where to go. Netflix was in that weird stage of online mail order rentals before streaming was a thing - so it wasn’t totally obvious but even so. The lesson is clear - cannibalise yourself before someone else does, (although don’t do it at the top of a bubble market and chose the wrong option like Time Warner did with AOL).
A

https://www.cnet.com/news/blockbuster-laughed-at-netflix-par…

https://www.businessinsider.com/blockbuster-ceo-passed-up-ch…

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Back on 11/26/2018, I posted here my detailed due diligence on Carvana.
https://discussion.fool.com/cvna-twlo-top-price-revenue-gainers-…

The OP and ensuing thread contain a lot of misinformation and incorrect data that need to be addressed as follows:

SaintCroix: Now let’s look at those growth rates…


2014: $37.9 million
2015: $53.8 million
2016: $85.7 million
2017: $131 million 
2018: $144 miilion (first 3 quarters)

*That's right, they have a 50% plus revenue growth rate. In the used car industry.* ----------------------------------------------------------

From my Carvana post, here are the correct revenue numbers and YoY growth annually and quarterly that show beginning at Q1 2015, Carvana quarterly revenues at least tripled year-over-year for 6 consecutive quarters through Q2 2016, and, thereafter, at least doubled for 9 consecutive quarters through Q3 2018.


**MARKET  NO.   USED 		  WHOLESALE				  NET    Diluted  SHARE**
**CARVANA     CAP    OF   VEHICLE   Change   VEHICLE   Change   REVENUE	Change	 INCOME	   EPS	  PRICE  Change**
**FY/QTR	    ($M)  MKTS UNITS SOLD  YoY	  UNITS SOLD   YoY      ($M)	 YoY	  ($M)	   ($) 	   ($)	  YoY**

11/21/18 6.300 B                                                                                  41.68
   									          	
Q3 '18	 5.428 B   78   25,324	  116.1%    4,408    145.3%   534.921   137.3%  (16.042)  (0.50)  38.75  164.0%								
Q2 '18	 5.818 B   65   22,570    111.3%    3,658    131.5%   475.286	127.0%	 (9.965)  (0.41)  41.60	 103.2%
Q1 '18	 3.003 B   56   18,464    121.6%    2,342     81.8%   360.422	126.6%	 (7.043)  (0.53)  22.93	 106.6%

**FY 2017	 2.606 B   44   44,252    135.9%    6,509    145.5%   858.870	135.2%	(62.841)	  19.12**	
											
Q4 '17	 2.606 B   44   13,517    141.4%    1,844    152.3%   265.053	148.1%	 (5.480)  (0.45)  19.12	
Q3 '17	 1.949 B   39   11,719    133.3%    1,797    128.3%   225.379	128.0%	 (4.380)  (0.29)  14.68	
Q2 '17	 2.718 B   30   10,682    145.3%    1,580    151.2%   209.365	142.0%	(14.542)  (0.28)  20.47	
Q1 '17		   23    8,334    120.3%    1,288    155.6%   159.073	118.1%	(38.439)  (0.28)  11.10	

**FY 2016		   21   18,761    187.6%    2,651    147.8%   365.148	180.0%  (93.112)**				
											
Q4 '16		   21    5,600	  155.5%      731             106.827	151.3%	(35.694)  (0.26)		
Q3 '16		   16    5,023	  182.8%      787	       98.844	177.1%	(21.985)  (0.16)		
Q2 '16		   14    4,355	  224.3%      629	       86.526   202.5%	(18.108)  (0.13)		
Q1 '16		   11    3,783	  212.1%      504	       72.951	237.7%	(17.325)  (0.13)		

**FY 2015		    9    6,523	  209.9%    1,070    681.0%   130.392   212.8%**					

Q4 '15		    9	 2,192	  182.8%		       42.514	200.7%				
Q3 '15		    5	 1,776	  206.7%		       35.668	202.4%				
Q2 '15		    5	 1,343	  208.0%		       28.607	202.8%				
Q1 '15		    4	 1,212	  284.8%		       21.603	243.0%				

**FY 2014		    3	 2,105		      137	       41.679**				
												
Q4 '14		    3	   775				       14.137					
Q3 '14		    3	   579				       11.795					
Q2 '14		    2	   436				        9.449					
Q1 '14		    1	   315				        6.298																								       					

=================================

xSaintCroix: The used car industry is a massive, $7.8 trillion industry, in the U.S. alone. Last year that industry grew sales at 1.6 percent.
——————————————————

$7.8 trillion must be a typo error. From my Carvana post, I provided the following data from the U.S. Census:

The U.S. automotive retail industry is gigantic as the largest retail trade sector in the U.S.

According to data in the latest available 2016 Annual Retail Trade Survey by the U.S. Census, the 2016 annual sales for the business of motor vehicle and parts dealers accounted for $1.144 trillion or 24% of the total $4.856 trillion retail sales in the U.S. as shown in the following table.

2016 Annual Retail Trade Survey
Estimated Annual Sales off U.S. Retail Firms by Kind of Business: 1992-2016


**ANNUAL RETAIL SALES in $ Billion        2016	 2015	  2014	   2013	    2012     2011     2010     2009	2008	 2007**

**TOTAL U.S. RETAIL SALES**	             4,856.3  4,726.0  4,639.4  4,458.5  4,302.2  4,103.0  3,818.0  3,612.5  3,935.3  3,995.2

**MOTOR VEHICLE & PARTS DEALERS**	     1,144.4  1,094.1  1,020.9	  959.3	   886.5    812.9    742.9    671.8    785.9	910.1
• % of Total U.S. Retail Sales	         24%	  23%	   22%	    22%	     21%      20%      19%	19%	 20%	  23%

**TOTAL AUTOMOBILE DEALERS**	       984.4	940.5	 875.6	  819.3	   752.8    684.5    621.2    552.0    649.5	767.4
• % of Motor Vehicle & Parts dealers	 86%	  86%	   86%	    85%	     85%      84%      84%	82%	 83%	  84%
• % of Total U.S. Retail Sales	         20%	  20%	   19%	    18%	     17%      17%      16%	15%	 17%	  19%

**NEW CAR DEALERS**	                       877.7	842.1	 785.1	  735.4	   672.6    608.8    549.5    486.6    575.6	687.7
• % of Total Automobile Dealers 	 89%	  90%	   90%	    90%	     89%      89%      88%      88%	 89%	  90%
• % of Total U.S. Retail Sales	         18%	  18%	   17%	    16%	     16%      15%      14%      13%	 15%	  17%

**USED CAR DEALERS**	               106.7	 98.3	  90.4	   83.9	    80.2     75.7     71.7     65.4	73.9	 79.7
• % of Total Automobile Dealers 	 11%	  10%	   10%	    10%	     11%      11%      12%      12%	 11%	  10%
• % of Total U.S. Retail Sales	          2%	   2%	    2%	     2%	      2%       2%	2%	 2%	  2%	   2%

**AUTO PARTS, ACCESS. & TIRE STORES**       90.5	 89.3	  85.8	   85.0	    84.1     83.0     77.9     74.2	76.3	 74.7
• % of Motor Vehicle & Parts dealers	  8%	   8%	    8%	     9%	      9%      10%      10%      11%	 10%	   8%
• % of Total U.S. Retail Sales	          2%	   2%	    2%	     2%	      2%       2%	2%	 2%	  2%	   2%

With its e-Commerce platform, Carvana has seized the huge opportunity to disrupt the retail used car sector and attract more customers as it continues to grow its operations and expand into new markets.

As previously mentioned, the 2016 annual sales for the business of motor vehicle and parts dealers accounted for $1.144 trillion or 24% of the $4.856 trillion total retail sales in the U.S.

Carvana is in the fledgling e-Commerce business of motor vehicle and parts dealers, which accounted for only 2.8% or $32 billion of the aforementioned $1.144 trillion total.

========================================

GrowthMonkey: One more point which I forgot to mention in my previous post is that so far, the CEO’s dad has allowed Carvana to use his auto dealership company’s (DriveTime) facilities/car refurbishing centres for FREE; and this has artificially reduced Carvana’s costs.

According to the Carvana !0K 2017, Inspection & Reconditioning Centers (IRCs) are leased, not free, as follows:

ITEM 2. PROPERTIES.
Corporate Offices . In September 2016, we entered into a lease agreement effective through February 2024 with the option to extend to February 2039 for approximately 134,000 square feet of office space for our corporate headquarters in Tempe, Arizona.

Other Facilities . The below chart summarizes our material facilities other than our corporate headquarters. We recondition, photograph and store inventory at our IRCs and provide customers with the option to pick up their purchased vehicles at certain facilities, including multi-story glass tower fulfillment centers that we refer to as vending machines. Each of the IRC facilities listed in the table below is leased. Each of the vending machines listed below, except for our San Antonio Vending Machine, is leased through an operating lease or a sale leaseback transaction accounted for as a finance transaction. Markets where we do not have an IRC or vending machine that can function as a logistics hub are not listed in the table below. Markets where the vending machine is under construction are not listed in the table below. In these markets we lease or sublease office and parking space to facilitate deliveries. See Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Markets.”
Operations
GA IRC, Winder, GA
NJ IRC, Delanco, NJ
TX IRC, Blue Mound, TX
AZ IRC, Tolleson, AZ
Jacksonville Vending Machine
Raleigh Vending Machine
Austin Vending Machine
Dallas Vending Machine
Houston Vending Machine
Nashville Vending Machine
San Antonio Vending Machine
Birmingham Fulfillment Center
Atlanta Fulfillment Center

JKB2016: Have a look at the debt situation at CVNA. Debt to Equity ration of 7+. KMX’s debt is primarily for the their finance of vehicles. Strong balance sheet at KMX.

What JKB2016 is alluding to is known in the auto retail industry as “vehicle floor plan financing” which is excluded in long-term debt/equity ratios as explained in one of my past post elsewhere:
https://discussion.fool.com/value-candidates-in-auto-dealership-…

Now, regarding all your debt comments, first of all, I am aware of the relationship between debt and ROE and how one can be manipulated to affect the other. I usually am debt adverse and look for companies with Total Debt/Equity less than 40%. However, high debt and high debt/equity ratios are justified givens in certain sectors like auto dealerships. I intend to look at other public auto groups and am almost fully convinced that all will have very similar debt profiles. Here’s what the LAD CFO reported in the last earnings call in July 2014:
At the end of the quarter, we had $28 million in cash and $84 million available on our credit facilities. Currently, $216 million of our operating real estate is unfinanced. These assets can provide up to an additional $162 million of available liquidity in 60 to 90 days. This brings our total liquidity to $274 million, and we’re being comfortable with our overall level of available credit.
At the end of June 30, excluding new vehicle floor plan financing, we had $260 million in [long-term] debt, of which $167 million is mortgage financing, $96 million is used vehicle financing with the balance on our revolver. We have no mortgages maturing until 2016, we have no high-yield bonds or convertible notes outstanding. We were in compliance with our debt covenants at the end of the quarter.

The excluded new vehicle floor plan financing are $806.7 million in floor plan notes (payable: non-trade) and $20.6 million in floor plan notes payable. What is floor plan financing?
Go to any large auto dealer and there are hundreds of cars on the lot. You may wonder how much the dealer had to spend to provide you with almost limitless choices. What you don’t realize is that, like most new car dealers, a floor plan was used to finance the cars. Simply, it is a way for an auto dealer to use a lender’s funds to finance the cars, and until each of them is sold, the lender holds title to the cars. The dealer then receives payment, hopefully including a profit, and remits the balance to the lender who, in turn, releases the title to the car to the new purchaser.
http://www.ehow.com/about_5065836_floor-plan-financing.html

So about 75% of LAD’s total debt of $1.10 billion are $827.3 million of floor plan notes. Almost all auto dealerships use floor plan financing which yield very high total debt/equity ratios. BTW, Lithia has the lowest ratio among the other publics in my original post.

In my Carvana post, I compare the Carvana capital structure with CARMAX and AutoNation and show Long-Term Debt/Equity ratios that exclude vehicle floor plan financing.


**CAPITAL STRUCTURE	      CARVANA	             CARMAX	        AUTO NATION             CARGURUS**
                              Q2 2018               Q2 2018                 Q2 2018              Q2 2018
			
Cash & equivalents        $ 199.192 M	         $ 37.147 M	           $ 69.2 M           $ 31.762 M
Working Capital           $ 204.669 M	      $ 1,738.629 M	         $ (838.2 M)         $ 113.735 M
Current Ratio   	      1.47	            2.35	              0.85               3.25
Long-Term Debt   	   $ 76.873 M	        $ 840.187 M	          $ 414.5 M              O
Stockholders’ Equity      $ 359.109 M	      $ 3,482.118 M	        $ 2,369.3 M          $ 156.391 M
LT Debt/Equity   	     21.4%	           24.1%	             17.5%               0%

=====================================

Finally, my Carvana post addressed its corporate management and Ernie Garcia II’s involvement as follows:

CORPORATE MANAGEMENT

In 2012, Carvana was co-founded by Ernie Garcia, III (Board Chairman, President & CEO), Benjamin Huston (Chief Operating Officer) and Ryan Keeton (Chief Brand Officer) with headquarters in Tempe, Arizona. Carvana’s top executive management team is relatively young, well-educated (primarily Stanford and/or Harvard), experienced and focused on disrupting and transforming the retail used car sector with their company’s custom-built business model and e-Commerce platform.

At present, the insider ownership is 21.41% with major shareholder Ernest C. Garcia II (the father of CEO Ernie Garcia III) holding 52,937,458 shares. Ernest Garcia II is a self-made billionaire (rank #127 on Forbes list of 400 of the the Wealthiest Americans with a real time net worth of $3.8 billion), who currently owns and runs DriveTime Automotive, the nation’s 4th biggest used car retailer.
https://www.forbes.com/profile/ernest-garcia-ii/#6fb2645e534…
[Here is some full-disclosure background about Ernest Garcia II’s remarkable rebound from failure to a self-made billionaire. In October 1990, Garcia, then a Tucson-based real estate developer pleaded guilty to bank fraud, following the failure of Charles Keating’s Lincoln Savings and Loan Association. Garcia "fraudulently obtained a $30-million line of credit in a series of transactions that also helped Lincoln hide its ownership in risky desert Arizona land from regulators.” Garcia spent three years on probation, and he and his firm filed for bankruptcy. In 1991, he bought Ugly Duckling, a bankrupt rent-a-car franchise, for under $1 million and merged it with his own fledgling finance company, and turned it into a company selling and financing used cars for sub-prime buyers with poor credit history. Fast forward 27 years, he’s now the nation’s 4th largest used car retailer. In 2002, the Ugly Duckling name was changed to DriveTime Automotive.]

Carvana was founded by Garcia’s son, Ernie Garcia III, as a subsidiary of DriveTime Automotive and was later spun out. This explains why Carvana, a Tempe, Arizona based company, chose Atlanta, Georgia as its first market to target and penetrate.

Initial Public Offering

On 4/28/2017, Carvana went public, pricing its shares at $15, ahead of the IPO. CVNA opened down at $13.50/share and closed its first trading day down at $11.10. On May 3, 2017, Carvana Co. completed its IPO of 15.0 million shares of Class A common stock at a public offering price of $15.00 per share. Carvana Co. received approximately $205.8 million in proceeds, net of underwriting discounts and commissions and offering expenses. Carvana Co. used the proceeds to purchase approximately 18.8 million newly-issued membership interests of Carvana Group at a price per unit equal to 0.8 times the initial public offering price less underwriting discounts and commissions. In connection with the IPO, Carvana Co. transferred approximately 0.2 million Class A Units to Ernest Garcia, II in exchange for his 0.1% ownership interest in Carvana, LLC, a majority-owned subsidiary of Carvana Group. After the transfer Carvana Co. owned approximately 18.6 million Class A units.

===========================

In late December 2018 when the CVNA stock price dropped below $30/share, I added to existing positions in several family accounts.

As always, conduct your own due diligence and decision-making.

Regards,
Ray

33 Likes

Ray,

Have you checked how much ‘rent’ CNVA pays to its biggest shareholder’s company (DriveTime) for ‘leasing’ its facilities?

Why hasn’t CVNA disclosed the fact that it ‘leases’ its facilities from Daddy Garcia’s company?

Do you think it is normal the the ‘Amazon of car dealers’ didn’t have to spend any cash on building out its own facilities and refurbishment centres and that everything was given to it by Daddy Garcia; who is the biggest shareholder of both companies!?

What will CVNA do when Daddy Garcia’s facilities run out of capacity and it has to spend real cash to build out its own facilities?

Best,

GM

2 Likes

$7.8 trillion must be a typo error.

Good catch, my bad.

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Do you really believe that Carvana is so under the radar that the stupid people on Wall Street have decided to price it with only a price to sale of 3, with those characteristics without a realllllllyyyyyyy good reason?

What is that reason, and why is that reason wrong?

The reason its price is down is because of shorts. 139% of the float is sold short.

The 52-wwek range is $16 to $72 a share. Clearly the market has no idea how to price this equity.

Shorts are shorting because they are narrow-minded about valuation. They’re obsessed with P/E ratios. They are short-term thinkers and are failing to see the larger picture.

I saw this with Amazon back in the day.

1 Like