Carvana Takes Another Hit
Carvana is going to cut 1,500 jobs, which is about 8 percent of its workforce.
The cuts, along with the closing of some locations and the elimination of some work shifts, are all meant to save costs. A source told Bloomberg that it's because of the "challenging economic environment".
The cuts will affect operations, technology, and corporate roles. Those who are let go will get separation/severance pay through at least the new year, plus three months of healthcare coverage and unvested equity awards via cash payments.
Based in Tempe, Arizona, Carvana is struggling with a cratering stock price and cash outflow. That's because after seeing a surge of success in 2021 as the lack of new-car supply drove used-car prices up, the market has shifted. Used-car prices are falling while inflation is rising and that has negatively impacted consumer demand for pre-owned vehicles.
As of Thursday, Carvana stock had plummeted 96 percent during the year. The stock is just under $7 as I type this.
[Image: Carvana]
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Tim Healey grew up around the auto-parts business and has always had a love for cars — his parents joke his first word was “‘Vette”. Despite this, he wanted to pursue a career in sports writing but he ended up falling semi-accidentally into the automotive-journalism industry, first at Consumer Guide Automotive and later at Web2Carz.com. He also worked as an industry analyst at Mintel Group and freelanced for About.com, CarFax, Vehix.com, High Gear Media, Torque News, FutureCar.com, Cars.com, among others, and of course Vertical Scope sites such as AutoGuide.com, Off-Road.com, and HybridCars.com. He’s an urbanite and as such, doesn’t need a daily driver, but if he had one, it would be compact, sporty, and have a manual transmission.
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I predict assets of Carvana are purchased out of bankruptcy by EV manufacturer.
AND, at the present time, 19 of the state's Attorneys General are investigating them for fraudulent practices. Yet, they continue to market vigorously, simply because they haven't been officially busted for anything. When will this travesty end?
Not only have I had a few friends making money buying out their leases to sell to Carvana...I have my own.
Now I know an RLX isn't for everyone, which is exaclty why it fits me, if that makes sense, I know they did not compete well in their segment and all and led to low resale which is why I have always had my eye on one due to the bang for the buck (literally you can get one for the price of a TLX)
So, at the end of 2017 I purchased a brand new Fusion SE for 7k off sticker. Literally it was a perfect car, not a single issue. Actually, one of the better cars I have owned! Only complaint was gas mileage not competitive for segment (Case in point my 3.5 v6 RLX gets only about 2-3 mpg less overall according to my calculations compared to the turbo 4)
However, Carvana offered me $2,900 more than I paid for my car NEW!!
I noticed many of Carvana's used cars were priced well above KBB Private Party Value
I find the PERFECT RLX from Flordia, late build 2016 with tech package. AND its priced RIGHT at KBB Private Party Value! Couldn't believe it. 1 owner, acura dealer records on the carfax, no accidents. I have driven it for 11 months and 10k miles and love it.
And I only had to pay about 5k out of pocket. For a car that stickered at 58k new vs my 27k sticker fusion.
Not for everyone, just how Carvana worked out for me
Caravan is owned by the same Garcia family that owns DriveTime. Certainly there can't be any shady business going on here!