Carvana Co. shares have gained nearly 1,000% this year, a move harder to wrap around one’s head considering that it follows two straight years of losses for the stock and concerns about the company’s viability.
Carvana
CVNA,
reported strong second-quarter results earlier Wednesday. Key to that was a debt-reducing deal aimed at bolstering liquidity. A debt swap earlier this year was called “tantamount to default.”
The auto retailer initially spooked investors by moving its results a full two weeks earlier, with the stock tanking in the after-hours session on Tuesday as investors assumed bad news.
Don’t miss: Carvana’s debt restructuring is good news, but its losses are ‘hardly in the growth stock handbook,’ analyst says
The march upward for the stock in 2023 follows two years of negative results, including a 98% drop last year. Carvana became a public company in 2017.
Carvana rode a continued wave of demand for used cars to more than double its revenue in 2021, but that created its own problems for the company.
By the end of that year, the retailer was talking about “significant operational constraints” that came with the surge, both in buying more cars to boost its inventories and selling — more last-mile pickups, more customer care interactions, and more complex title-processing and registration requirements, for instance.
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