Carvana Co. (NYSE: CVNA) is making headlines as it gears up for a significant restructuring. Over the past 18 months, the company has been focusing on operations and debt reduction amidst bankruptcy concerns.
Carvana’s efforts have proven successful, leading to a notable improvement in its stock performance. While the stock has rebounded from less than $5 per share to over $55 at the start of 2024, it still remains significantly below its peak of over $370 per share reached during the 2021 COVID-19 pandemic.
The restructuring is crucial for Carvana and its major shareholders, particularly CEO Ernie Garcia III and his father, Ernie Garcia II, who collectively control 88% of the company through special voting shares. The company’s CEO has expressed confidence in their progress and does not expect a return to a situation like before, stating that the pressure of the last two years has forced them to focus on the most important things.
As of the conclusion of the third quarter, Carvana had $544 million in cash and cash equivalents, a $228 million increase from the previous year. The company’s overall liquidity, including secured debt capacity and other elements, amounted to $3.18 billion.
Carvana’s debt structure includes both existing and new notes, with maturity dates ranging from 2025 to 2030. Collectively, the old and new notes make up approximately 78% of the company’s nearly $6 billion total debt.
The company is scheduled to report its fourth-quarter and fiscal year 2023 financial results on Thursday, February 22. Investors will be eagerly awaiting these results to gauge the progress of Carvana’s restructuring efforts and its financial health.
In terms of stock performance, CVNA shares closed higher by 2.16% to $43.45 on Friday. After-hours trading saw a slight decline with shares falling 0.23% to $43.35.
Carvana’s restructuring and focus on debt reduction are critical steps for the company’s future success. With the ongoing progress and improved stock performance, investors will be keeping a close eye on the company’s financial results and its ability to sustain its positive momentum.
