@@Tie509 Exactly, in fact the old man laid low for a decade after he was convicted of fraud before starting this Carvana Scam then handed over the company to his son. We can be sure that the apple doesn't fall far from the tree..........
Carvana is a scummy company. I've dealt with them for years as a dealership technician. They do absolutely nothing to their cars before selling them. It's the customer's responsibility to take the car to a shop after buying it to get any issues fixed. Yes Carvana pays the repair bill, but they should have done that BEFORE selling it, not after.
That's more a symptom of their overcentralization and blitzscaling. It's not like your local owner/operator where you just call their landline and get the owner.
Let’s not forget the founder/ceo is simply a puppet and company is run by his father who also owns a large car seller called drive time. They both dumped their shares when stock hit ATH.
Carvana is currently being pumped by Wallstreetbets, and can implode any day and for any (or no) reason. Unless you bought earlier this year, it’s way too risky to buy now.
lol nothing is being pumped by deadstreetbets dude.. the subreddit is not even that alive anymore. But yes, it is a bit too risky now. Still one of the most frustrating stocks ive ever dealt with. But after seeing bullshit like Farfetch and First Republic Bank get de-listed and shareholders getting royally fucked Ive decided to not trust any American traded stock when it comes to some "savior" or "buyout" talk. Been too many times now that shareholders have been destroyed completely
Some people did YOLOs many years ago and made a lot. But the stock market is a zero sum game. For someone that gains, another loses. And typically it's a big bank winning, not the average citizen.
To say conventional dealerships get free marketing from having their inventory visible is to ignore the premium they pay for such visible real estate. They could enjoy significant savings by storing their inventory on cheap real estate, but they pay extra for real estate with good visibility and treat the difference as a marketing expense.
It's not just advertising. Picture this. There are two used car lots. One is right down the street. The other is a 45 minute drive. You know nothing about either one. Which one are you going to? There are two grocery stores in my area. I go to the one I like less because it's much closer.
Car dealerships are typically on cheap land visible from the interstate on the edges of town. This is by design. Cities do not want dealerships taking up prime real estate as it's a low employment eyesore and dealerships need lots of space cheap. Nothing about dealership lots is expensive or premium but it is ideal for their business model. Cities will often incentive dealerships to move further out as the city grows and their space becomes more valuable for other uses.
@@ReflexVE Capitalism does that automatically. The land becomes more valuable the more useful it is. It doesn't require a conspiracy or government action.
@@Jordan-Ramses I was a planning Commissioner for 12 years. I'm literally telling you how it works. You don't have to believe me, I don't really care. The initial poster stated that the real estate used for car dealerships was expensive due to location. My point was that it's the opposite, it's cheap by design and cities encourage this model with zoning and sometimes direct incentives. My city literally created a special zone that only permitted car dealerships to permit them to shift allowed location over time.
I sold my accord at carvana. When I was there, there was 10 people in line, all also selling cars. Maybe I just don't know how it works lol, but literally no one was buying a car.
Uh, no. That's a fact of the dealer's spread. Carvana would have sold your car for 8k to that same buyer. That's how they make money, and people put up with it rather than do all the work themselves finding a buyer
As someone who had to buy a new vehicle during the worst of the supply crunch, I probably could have benefitted from using Carvana. There was only 1 option within hundreds of miles of me, so I took it. Now that supply has recovered and dealer lots are full, I can't imagine using Carvana unless the prices are extremely competitive. I don't want to spend thousands on something without physically seeing it first.
I bought a used car this year and my experience with carvana is that they had less variety of cars than the physical dealerships near me and were significantly more expensive than comparable cars at the dealership. I don't know if this is a typical experience or if I just have more dealerships near me than most people, causing a decrease in price from competition, but they weren't a good choice for me.
Thank you for focusing on Carvana. It's again pumped to $60, a Market cap of 13 Billion Dollar. Anyone shorting, be careful, it's up 1200% Year-to-Date. Isn't the new debt also securitized on buildings or cars?
The idea is great. People want used cars but don't want the used car buying experience. I bought my 2014 Lexus from Texas Direct Auto. Found the one I wanted and had it delivered to my office. Price was fair and it was a no hassle experience. Would buy from them again.
No hassle negotiations is how they get you. Give up convenience for no hassle experience, pay 20% above going prices for same make/model/condition vehicle! Yikes
It would not surprise me to see the insiders selling their stock. Cashing out seems like a smart move for them. I see they have former Vice President Dan Quale on their board.
The whole Carvana business model was a pump and dump scheme, and it worked. Even if Carvana goes under, the original investor before it went Public is rolling on cash.
A friend of mine worked at Carvana for ages while in college. She told me they paid her, partly, in stock. I remember thinking "Wtf? what company pays their lowest level employees in stock?" ( a very poorly managed one )
If you short this for the bankruptcy play. You DCA. If you have $100,000 account you would short like 100 shares and sell put against it (basically the reverse of covered calls). If it goes higher just keep selling monthly puts. You would only add on if it goes above 100. Add short 50 shares. To push your average up so you can keep selling puts under cost basis. Your portfolio should be rising. You should also hedge by owning KMAX with money received from selling cvna stock and put premiums.
I just brought a car for carvana took it to the dealership for the computer diagnostic test!! That same day!! Thank God I did because it’s under warranty they are paying to get everything fix!!
Because the creditors are at risk of losing billions if Carvana defaults, I figure they’ll continue to kick the can down the road for as long as possible… I feel like Carvana will likely be around for a while because of that very reason..
Don't think they are able to serve the delayed loan in the future. Not all old cars can be sold (thus additional depreciation cost in future) and with new car production on the full production swing.
I’ve only bought used cars throughout my life, most were close to new or excellent condition. I had a friend but a stolen car from Carvana which was like de-advertisement for me to stay the hell away from Carvana.
Carvana, the company that managed to take an already crappy business in the form of car dealerships, and make it even worse by adding crap tonnes of capex! Truly genius.
Car dealerships don't have to be horrible. Remember Saturn? No hassle no commision fixed prices on cars. Dealers can also sell online and deliver. The business model of lose money for years to compete and take marketshare just doesn't work here.
My father-in-law bought an SUV from them this October, the car fax said it was fine, Carvana said it was fine, the mechanic, on the other hand, said it needs 5k worth of work just to be safe. So, we'll never do business with this outfit again. Buyers be very aware.
Whenever a company describes themselves as "disruptive", you should always parse that as "unsustainable business model". Either they don't actually know how to properly implement the new strategy that's supposed to turn their chosen industry on its head, or it just wasn't a good strategy to begin with which is why nobody has been using it.
I would say you're wrong about that brick and mortar having free marketing from a parking lot. I think the internet model is the best because you get people that are actually looking for a car. People driving by are not potential customers because they already have a vehicle.
if they’re supposed to make 3x the profit on cars now and are losing people from decreased advertising, how are you not saying they’re going to go under?
It was true at the time. Recall Keith Gill's racket was buying companies with pending bankruptcy knowing all they needed to do was survive to double his money.
I tell you why they are failing. I bought a 2011 avalon from them for about 18k. They brought it to me not detailed, the transmission was shot already at 70k miles, the tires were out of balance, the radio didn't work, and it hadn't had an oil change in 10k miles at least. They didn't even look at the car beyond taking a picture & even those were out of date where the interior was torn up really bad with no warnings about that so I sent it back... that's why they are bankrupt not because of us.
Major investor "Ernest Garcia the II was a convicted felon for bank fraud for his role in the Charles Keating Lincoln Savings Bank collapse". Thanks for helping drive the entire country into major recession.... Serves em' right, though I admit I like the Carvana business model.
@8:30 careful with your graphs. having different top end values on the y axis is deceptive. I know it's only off by 500m, but it's misleading at the least to show 2030 principal payments to be the same size bars when 1 is significantly less. (although your conclusions are correct :) just something to watch.)
Absolutely F useless financial analysis and business case proposals. They took on lots of debt to buy seriously overpriced investments like the car auction business.... it was effectively debt funded costing c10%.... I'd bet that they bought it for a yield far below that. As a stand alone investment they needed to model how much additional volume and consequential costs would track to ensure at least break even. I bet they didn't factor in things like loss of auction volume with conpeting car dealers who didn't want to be associated with Carvarna. Anyway, another useless business like GME and all the others 'to the moon' on WSB.
It's never a good idea to name your company so close to Nirvana. You need to be unalive to reach Nirvana. But the way this company is going, I think it's Neraka.
Blitzscaling and overcentralization. When you go from zero to a million customers in a couple years and no customer service department to a big one in a few years, you can imagine exactly how crazy that office is
This just shows how dangerous it is to follow the advice of folks like you and the tiktok crowd. From predicting bankruptcy to 10 folds rally is telling to how "opinions" from wanna be financial analysts can ruin lifes This stock rally advantage is built on the misery of ppl who panicked and sold low.
They sold over 400,000 vehicles in 2022. Not world domination level sales, but enough to keep the machines running. The problem is the only buyers are people who live in the same city as the machine and even then local dealers are profitable
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