Ouch - Guess cars really don't come out of vending machines.

https://www.cnbc.com/2022/11/0...-vehicle-market.html

FTA:
Shares of Carvana
posted their worst day on record Friday after the company missed Wall Street’s top- and bottom-line expectations for the third quarter as the outlook for used cars falls from record demand, pricing and profits during the coronavirus pandemic.

The stock cratered 39% to end the day at $8.76 a share — slightly higher than its worst-ever closing price of $8.72 a share from May 2017. Shares of the online used car retailer have plummeted by 96% this year, after hitting an all-time intraday high of $376.83 per share on Aug. 10, 2021

The stock’s all-time low of $8.14 a share occurred less than a week after it started trading publicly on April 28, 2017. Carvana’s previous worst day of trading was a 26.4% decline on March 18, 2020.

Morgan Stanley on Friday pulled its rating and price target on Carvana. Analyst Adam Jonas cited deterioration in the used car market and a volatile funding environment for the change.

“While the company is continuing to pursue cost cutting actions, we believe a deterioration in the used car market combined with a volatile interest rate/funding environment (bonds trading at 20% yield) add material risk to the outlook, contributing to a wide range of outcomes (positive and negative),” he wrote in a note to investors Friday...

Guess it is time to cover my shorts.

YAA broke this on YouTube on Oct 21st. Great news if you're a cash buyer in the market for a used car (i.e. used car wholesale prices rapidly decreasing), but not that great if you're financing (i.e. the Fed rate changes every other month are causing financing costs to increase).

What the article leaves out is that:

it's more than just Carvana having shit quarterly reports. Other corporations listed on wall street are posting losses from overpaying for used cars.

the finance guys/gals never learn, are short sighted, and have a shit risk tolerance. The used car financiers spent the last 2 years rapidly increasing the amount of money they'd loan a subprime borrower for an overpriced used car. Sounds a lot like the '08 real estate crash where the American taxpayer bailed out a bunch of subprime mortgage financiers.

Here is an example of a YAA video on the used car market crashing (i.e. one of many on their channel):

quote:

Originally posted by tatortodd:
but not that great if you're financing (i.e. the Fed rate changes every other month are causing financing costs to increase).

We got caught in this one. Wife's Flex needed replacing.
Financed with the same credit union I used for car purchases in 2016 & 2018 at 1.99 & 2.9% respectively.
Today's market, a hair over 5%
Luckily, the Flex was a good trade & we had a chunk of cash down.

I’ll bet you it has a lot to do with the fact that
used cars are wildly overpriced and now the interest rates on them are approaching 10%

quote:

Originally posted by PASig:
I’ll bet you it has a lot to do with the fact that
used cars are wildly overpriced and now the interest rates on them are approaching 10%

That's one of the reasons I'm in no hurry to replace my 2012 Malibu.
My wife's Flex needed replacing, mine runs fine. Rather not have 2 car notes, less 2 at >5%.

I'm casually looking for a replacement for my 2010 F150. I was surprised to see yesterday that a 2021 model was at a price a 4 year old one was 3 months ago. I'm in no hurry to buy and it looks like prices are about to get a bunch more favorable

quote:

Originally posted by Appliance Brad:
I'm casually looking for a replacement for my 2010 F150. I was surprised to see yesterday that a 2021 model was at a price a 4 year old one was 3 months ago. I'm in no hurry to buy and it looks like prices are about to get a bunch more favorable

I had a 2016 XLT, sticker was $48k
Priced the same truck as a 2021 & it's was $57k

Cloth seats, 2wd, smaller ecoboost engine but it was the top trim XLT with the Sport pkg.

It's not just due to the used car market. Carvana has been a dumpster fire for quite some time. They've earned a reputation for terrible customer service and outright fraud, and therefore their business has been suffering for a while. It got to the point where various states pulled their car dealer licenses due to excessive complaints, plus a tsunami of lawsuits (several class-action), and a number of attorney general investigations and resulting fines. Couple all that with them piling on debt like it's going out of style, and the overall shakiness of the used car market, and it's no wonder investors are running as fast as possible from Carvana.

Carmax had been known for many years as one of the best trade-in prices. Carvana surpassed them the last 2 years.

Bad combo paying more than your competition for inventory and having a ton of inventory in a rapidly declining market.

^ TX Direct Auto/Vroom gave me a very fair price for my Mercedes. Didn't try Carvana, but Vroom was better than Carmax.

Car market declining with raising rates. Also there are some very serious questions about the family that runs the company and alleged shenanigans going on there.

There’s a FB group, Carvana Reviews and Experiences that time and time again reports of titling and licensing problems, undisclosed damages and other problems.

Maybe ok for some but I want to see what I’m buying before I sign on the line, I hate surprises.

***feverishly knocking on wood***

Love my mazda. Given the abuse I've dished out and the mods I've done I think I would have discovered if I had a bad one by now.

Carvana was not a flawless buying experience. It took them 4 months to get CO the title paperwork so I could plate it. They ate the temp tags tho.

I do think I got a good price. Interesting business experiment.

Carvana car vending machine? What a waste of money...

Typical American bullshit. An expensive tower of cars. Style over substance.

I know that cratered stock prices can be scary. But, a related stock, KMX, once was near delisting and is now fairly stable.

Carvana, though, has done something stupid in my view. They have chosen in their very unusual brick-and-mortar establishment, to portray the second most expensive purchase I will ever make as if it is candy out of a machine. Equating a major purchase with a whimsical choice is misguided.

Beyond the vending machine, they offer nothing unusual or preferential. CarMax just facilitated the sale and delivery of a very nice Tiguan to my mother in Ian-ravaged Fort Myers, direct to her door. Total transaction time was two days.

Carvana can do nothing different, and can only match the experience. This moves the equity message from "we have a vending machine" to "we can be like CarMax." Not good retail.

Add to this the morass of bad business practices, and I don't think Carvana will survive.

I'm confused. If the stock was at 376 in August why does that chart above my post show a high of 150ish in August? Which is right?

Even calling it an intraday high, which I assume is the high between open and close, I find it hard to believe it spiked from 150 to 350 during a trading day or if it did what the actual fuck?

Because it's a different company's stock.

Carvana Stock: