Carvana in troubled financial waters?

[Aherpa]

Anyone involved with Carvana? You might want to check them out more closely. . .

https://www.kiplinger.com/investing/stocks/carvana-stock-plunges-amid-bankruptcy-chatter

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[gte105u]

Anyone involved with Carvana? You might want to check them out more closely. . .

https://www.kiplinger.com/investing/stocks/carvana-stock-plunges-amid-bankruptcy-chatter

If you sold to them just be sure the check clears.

If you bought, be sure your title and registration are in order. That was an issue already, before potential BK concerns.

 

[RockHoundTX]

I watch several daily YouTube videos put out by used car dealers. Carvana sells some of their inventory in the wholesale channel via the auction house they bought last year for $2B+. The dealer basically said yesterday that there is no way he would buy a Carvana car right now (and this is the wholesale channel) since there is just too much risk of not getting the title or legal fights due to bankruptcy litigation. Several other dealers have mentioned the same over the last week or so. If used car dealers are willing to pass up on deals since their is too much risk, that says something.

It was already reported last week that Group 1 Automotive bought over $200M in cars from Carvana at 80% of wholesale vale (MMR). Thus, Carvana is already dumping cars for way less than they paid for them just to get temporary cash. I can't imagine Carvana still being around 2 months from now. They real question then becomes what happens to all the used cars they have in inventory during bankruptcy proceedings. Will someone (Group 1?) buy them all? Will the court dump them straight to wholesale? Will the court allow them to be slowly sold at wholesale? Carvana is likely paying 7%+ floor-plan interest on these vehicles so huge $$$$ if they hold on to them for any length of time.

 

[gte105u]

I watch several daily YouTube videos put out by used car dealers. Carvana sells some of their inventory in the wholesale channel via the auction house they bought last year for $2B+. The dealer basically said yesterday that there is no way he would buy a Carvana car right now (and this is the wholesale channel) since there is just too much risk of not getting the title or legal fights due to bankruptcy litigation. Several other dealers have mentioned the same over the last week or so. If used car dealers are willing to pass up on deals since their is too much risk, that says something.

It was already reported last week that Group 1 Automotive bought over $200M in cars from Carvana at 80% of wholesale vale (MMR). Thus, Carvana is already dumping cars for way less than they paid for them just to get temporary cash. I can't imagine Carvana still being around 2 months from now. They real question then becomes what happens to all the used cars they have in inventory during bankruptcy proceedings. Will someone (Group 1?) buy them all? Will the court dump them straight to wholesale? Will the court allow them to be slowly sold at wholesale? Carvana is likely paying 7%+ floor-plan interest on these vehicles so huge $$$$ if they hold on to them for any length of time.

It would depend on what they file in part. If 11, imagine they liquidate as part of settling up. If 13 probably a deeper assessment of vehicle values in part of the structured payment plan. There is also the possibility they go private to settle out debts and then could get real interesting what happens.

Wouldn't buy Carvana stock for risk it goes to 0. Would be real careful buying a car from them to watch for the title to process. I'd only do it if you're getting a rock star deal since the risk you are taking should be reflected.

 

[cavemold]

Looks like there going under … wouldn’t go with them

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