Carvana shareholders have something to celebrate as the online used car dealer reported a quarterly profit of $49 million and record earnings before interest, taxes, depreciation, and amortization of $235 million. This news caused the stock to soar over 30% in after-hours trading and reach a closing price of around $121, up nearly 150% since the beginning of the year and up nearly 3,000% since late 2022 when the company was facing financial difficulties.
One of the biggest beneficiaries of Carvana’s remarkable recovery is Ernest Garcia II, the company’s largest shareholder, and controlling stakeholder. His stake in Carvana is now valued at over $6 billion, a significant increase from less than $250 million in late 2022 when the company was struggling. Garcia II had sold $3.6 billion worth of shares before the stock plummeted in 2022, but he still holds a substantial stake in the company.
Recently, Garcia II has begun selling shares again. He sold 250,000 shares for approximately $20 million in April and plans to offload a total of 3.1 million shares over a three-month period as part of a new automated trading plan adopted in March. These sales will total $345 million based on Friday’s closing market price, further reducing his exposure to Carvana.
Garcia II has proven to be a savvy trader, having purchased 5.1 million shares at $80 each in April 2022 to help fund Carvana’s acquisition of used car wholesaler ADESA. He also bought an additional two million shares in June 2022, shortly after Carvana laid off 2,500 employees. These strategic trades have contributed to his estimated $10.6 billion fortune, making him Arizona’s richest resident.
In addition to Carvana, Garcia II is the sole owner of DriveTime Automotive, a used car dealership located in Tempe, Arizona. Carvana was spun out of DriveTime in 2013, and Garcia II holds over 80% of Carvana’s voting power through the Class B shares he owns, with the rest distributed among CEO Ernest Garcia III and billionaire investor Mark Walter.
Garcia II has not provided any comments on his recent trading activities, and Carvana was not available for immediate comment. With Carvana’s stock performing strongly and Garcia II’s calculated trades, it appears that the future remains bright for both the company and its largest shareholder. As the automotive industry continues to evolve, Carvana’s innovative online platform and Garcia II’s strategic moves are likely to play a significant role in shaping the company’s trajectory.
