They were riding high. Shareprice went to 376 dollars. They hit a million cars sold. They vere innovative and close to becoming the biggest car retailer of used cars in the USA. And then it fell apart. Within 18 months they lost almost 99 percent of value. Rising interest rates, and threats of recession have hit them hard. Still they have assets, and backers that could finance them away from potential bankruptcy.
The way they are going they would run out of cash before the end of 2023 unless they can increase productivity, and cut costs. And the amount of debts are sittings at levels too high to be sustainable.
Can they survive ? Well I wouldn’t put my pension funds on it, but at 4 dollars a share I see a potential upside on it. They upscaled the capacity in a market with sinking car prices, and acquired more cars to sell. A lot of cars . And they spent money like tomorrow will never come. But the founders still seem to have faith in the Company. And if they put back some of the money they made from selling shares at high prices, then it could bounce back. It’s worth a punt. It’s a very risky one, but if they get through next year, it could be a very profitable one . So I have bought in with a good feeling it will take off.
Oh yes. by the way. What do they say ? Never trade on feelings and emotions. Maybe next Christmas I be in first line at the Soup kitchen with the rest of the Carvana leadership ? Let’s hope not .