💀 Zombie Watchlist: $CVNA Hits New All-Time Low, Trading In Stock Temporarily Halted

:pushpin: Shares of Carvana were briefly halted Monday due to volatility.
:pushpin: The stock hit its lowest point on record, below $7 per share.
:pushpin: Volume spiked on the beaten-down used car seller name.

$CVNA daily, weekly, and monthly charts



Shares of the online car retailer fell 50% over the past two full trading sessions and were dropping another 18% in early trading on Monday as Wall Street questioned the company’s business model after a mixed third quarter.

Carvana swung to an adjusted operating loss of $186 million compared to a $9 million profit a year ago. Execs told analysts on a conference call they were preparing for a “difficult” year ahead, which didn’t help market sentiment around the stock.

2 Likes

Carvana’s stock soared throughout much of 2020 and 2021, earning it a peak market valuation of more than $60 billion. Supply chain snarls kicked off a shortage of new cars that sent buyers to the used market in droves. The price of secondhand vehicles began to surge as a result. And during the scariest depths of the pandemic, Carvana offered a way for people to buy cars online and have them delivered to their homes.

But now the used-car market is slowing down, dealing a blow to Carvana and other dealership chains. On Thursday, Carvana reported disappointing sales and a hefty third-quarter loss of $508 million, sending its already faltering stock into a tailspin. This year, Carvana has lost $1.45 billion so far.

Carvana, known for its vehicle vending machines, chalked up the poor results to a challenging economy and slowing demand for used cars. The Federal Reserve’s effort to curb inflation by raising interest rates has jacked up consumers’ monthly payments and made vehicles even less affordable in recent months, the company said.

This gentleman knows his used car business. I love his charts and graphs. He is also warning people on Twitter that if $CVNA turns into $CVNAQ that you’ll want to exit any holds of existing used car dealerships as the inventory will be swamped with Carvana inventory selling for pennies on the dollar.

Prices

Speaking of prices, wholesale used-vehicle prices decreased 2.2% in October and are now down 10.6% from a year ago.

Cox, Manheim

Mirroring Manheinm’s latest report, Black Book’s wholesale prices for the 2-6-year-old vehicle segments continued to decline in October at rates above expected seasonal depreciation. While the index is 3.3% below October of last year, it is still 52% above the pre-pandemic record of March 2020.

Black Book

I tweeted about the auction activity, and here are BlackBook’s numbers to confirm what I see. The Estimated Average Weekly Sales Rate dropped to 54% in the week of October 22nd. There are not a lot of buyers physically in the lanes, but there’s a fair amount of online bidding. Franchise dealers dominated in the lanes, while independent large dealers and rental companies were not as prominent.

Black Book

The volume of used vehicle listings is also above 2020 and 2021 levels, which is further confirmed by Manheim’s data, reporting the used retail supply at 49 days and the wholesale supply at 28 days - both are higher than October of the previous year.

Black Book

AUTOS

Carvana lays off 1,500 employees following stock free fall

:pushpin: Carvana is laying off about 1,500 people, or 8% of its workforce, following a free fall in the company’s stock this year and concerns around its long-term trajectory.

:pushpin: The email from Carvana CEO Ernie Garcia cites economic headwinds including higher financing costs and delayed car purchasing.

:pushpin: He says the company “failed to accurately predict how this would all play out and the impact it would have on our business

$CVNA end of day, Friday, 18 NOV 22, daily, weekly, and monthly charts



The price of the company’s stock closed down 13% to $7.05, a record low. Carvana, which was once touted as a disruptor in the used-car dealer industry for its online sales, has seen recession-wary investors flee this year from risky and expensive growth stocks.

Carvana’s shares have plummeted 97% so far this year as potential buyers grapple with higher interest rates and stubborn inflation. Just last week, the company said it was cutting about 1,500 jobs, or 8% of its workforce, after burning through $2 billion of cash over the six months ended March 31 by at least one measure. Meanwhile, the trading in its bonds show the market believes there is a high chance of default.

“As used car prices fall, we believe that Carvana will struggle to make a profit on vehicles previously purchased at high prices,” Argus Research analyst Taylor Conrad wrote in a Monday note, downgrading the rating on the stock to sell from hold and noting the company is highly leveraged. “We believe that the shares are overvalued.”

$CVNA is down -41.51% at this moment, while hitting a new All-Time Low of $3.55 per share earlier this morning. Whoever writes the book on this fraud should receive a movie deal just on the story line of ownership.



The story behind this latest collapse in $CVNA stock price:

Scroll back up to restore default view.

Yahoo Finance

Carvana stock collapses amid bankruptcy fears after creditor pact and another $1 price target

Alexandra Semenova

Alexandra Semenova

·Reporter

Wed, December 7, 2022 at 10:41 AM·2 min read

In this article:

  • CVNA

-42.9955%

This is the firm which is forbidden to sell in certain states (I’d love to know how many states AGs have banned them altogether) because they were selling cars with no titles and new owners were being stopped by police - and arrested in some cases - for not being able to get license plates at the DMV after the 30 Day Temp Tags ran beyond their date.

And then there’s the paying more for used cars than what a new car will cost you. We won’t get into that part of the fraud today. Let’s just say, this crash is going to affect used car prices in a negative way, although, here in Florida cars are needed after so many were trashed by Ian.

Pop the popcorn.

Catching Up on $CVNA with all that bad news out of $KMX

9 DEC 22

Carvana Co. bonds were rallying off their worst levels Friday but their deeply distressed levels continued to reflect steep concerns about a potential bankruptcy.

The used-car retailer’s most-active 10.25% coupon bonds coming due in May 2030 were trading at about a $45 price on Friday, or near 29% yield, according to BondCliQ. That compares with a price of almost $90 in June for the CCC-rated class of bonds and 12.3% yield.

Similar bonds traded at prices as low as $40 earlier in the week. Bonds priced below $70 on the dollar are widely considered on Wall Street as distressed, or a default risk that could be costly for bondholders. A look at the broader market for U.S. speculative-grade, or “junk,” bonds shows yields on debt rated CCC and lower were closer to 15% at last check, according to the ICE BofA index.

11 DEC 22

12 DEC 22

21 DEC 22

:pushpin: Carvana reports its total gross profit per unit sold and aims to increase that metric over time.
:pushpin: This metric mixes the results from the retail and wholesale businesses in a way that doesn’t make much sense.

:pushpin: Investors have to dive deep into the company’s Securities and Exchange Commission filings to unravel the nonsense.

22 DEC 22

In May, used car market disrupter Carvana (CVNA) announced it would lay off 12% of its workforce, and take on higher cost debt.

An email to employees from Carvana Chief executive Ernie Garcia at the time said, “It is an understatement to say a lot has changed about our environment. Inflation and interest rates are up, supply chains are disrupted, and consumer and investor sentiment has shifted.”

Richmond, Va.-based CarMax began warning of the trend shift during its Q1 report in April.

$CVNA daily, weekly, and monthly charts. strong text Note: was within .10 cents of its All-Time Low set just two to three weeks ago: