crack in pricing start? Carvana

[cerbomark]

https://finance.yahoo.com/news/carvana-stock-tanks-december-7-154119414.html

Could this be a result of overpaying for all those cars?
First sign in correction maybe?
Interesting, many here predicted this in threads before.

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[Skye]

Reverting to the mean as it were.

Book value for the company, what it's worth, net, is close to $4 a share; about where it is trading.

More telling is the income statement: negative net income the last four years.

Cash flow? It's horrific.

Carvana officially began talks yesterday to negotiate debt, possible bankruptcy.

Difficult to operate a company that's losing money all the time. The only thing that kept Caravana going was the belief people weren't going to stop buying cars and cheap, short-term financing.

Carvana is not the only company operating on hopes and dreams. With increases in interest rates and a recession upon us, IMO, I expect several other businesses, propped up by nothing more than 1) cheap financing and 2) hype, to implode.

 

[ice445]

Given Carvana's business model was making back end money off the financing for their inventory, I think this has broader implications than just "Carvana dumb and bad". Like yeah, it was clearly run fast and loose, but the rug pull isn't going to only affect them going forwards.

 

[Skye]

I like their business model, the idea of what they were doing. I don't expect it to go away.

I wish all the employees well.

 

[MISFITGT]

If they do go out, whoever has access to the dealer auctions are going to have a blast. Here in Saint Louis car selling has slowed down substantially. People just aren't willing to buy a car with these interest rates/overpriced cars unless they have to.

 

[ORRadtech]

On a similar note, our local Atlanta consumer guru reported this morning that used car prices are down 16% over a year ago. It seems new car inventory is up and demand is falling so prices are starting to follow.

 

[Bikeman315]

Just FYI, I posted this awhile ago.
https://www.mustang6g.com/forums/th...tlook-darkens-for-used-vehicle-market.182078/

 

[Seanuf99]

On a similar note, our local Atlanta consumer guru reported this morning that used car prices are down 16% over a year ago. It seems new car inventory is up and demand is falling so prices are starting to follow.

Clark Howard?

 

[Seanuf99]

If they do go out, whoever has access to the dealer auctions are going to have a blast. Here in Saint Louis car selling has slowed down substantially. People just aren't willing to buy a car with these interest rates/overpriced cars unless they have to.

I am in STL as well. Have been noticing more and more 350s on the lots, most for much less than they were selling for in June.

 

[paulm1]

Carvana's going belly up. Couldnt happen to a nicer company.

 

[MISFITGT]

I am in STL as well. Have been noticing more and more 350s on the lots, most for much less than they were selling for in June.

Glad to see another person from St. Louis.

 

[Goterr0r]

STL here as well. I'm seeing the same on lots. They went from being empty to seeing the same cars filled to the brim not selling anymore.

I need a van for the wife and still holding out as long as we can for now.

 

[KingKona]

Let me know when 0% for 72 months is back.

Until then, not interested.

 

[shogun32]

Have been noticing more and more 350s on the lots, most for much less than they were selling for in June.

wait wait wait wait. The kool-aid drinkers over in the Shelby forum said "nobody regrets buying a Shelby no matter how much they paid (eg. ADM) and prices were never going to come back down."

Were they wrong?

 

[WItoTX]

LOL, 0% interest just means you paid for the interest up front, not over time. Which the finance companies much prefer.

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