Carvana might be dealing with losses and a negative cash flow, but the company is planning on coming back with improved numbers and updated technologies. After getting listed on the stock exchange, Carvana has attempted to keep up with the other companies entering into the market by continuing to "change the way people buy cars."
Carvana was founded in 2012 and has had its ups and downs in terms of finances, but in the company’s Q4 2018 results announcement, Founder Ernest Garcia recently stated the company has confidence that it will get to a point where it is selling two million cars per year. No timeline for this projection was given, but the company’s leadership seems pretty positive about its outlook.
Carvana’s stock has fluctuated throughout the years, soaring to $70 in September 2018 and then tanking to $30 within the next few months. On April 12, 2019, however, the stock was back up to $60. Due to the sharp drops the stock has experienced, short sellers have become big investors in Carvana. In fact, the company has even made it onto the Russell 3000 Index’s most-shorted security list, making investors nervous.
Neil Weinberg and Tom Metcalf of Bloomberg reported that a part of Carvana’s business includes originating and selling auto loans but that some of these are being offered to buyers with lackluster credit and nobody is quite sure who they are. The article noted one buyer is Delaware Life, but not much is known about others. What is known, however, is that regardless who’s buying, the company’s executives have become worth a lot of cash.
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