It looks like Carvana has taken the poison pill to try to avoid a hostile takeover. I’m not really sure who would want the company in it’s current state, but who knows? There are tons of wealthy people out there who could absolutely take advantage of the crazy low stock price. Some of you may not be familiar with the term poison pill, but it is basically a series of defensive maneuvers to protect a stock from someone buying the controlling interest and essentially stealing the company. This might ring a bell because Twitter did this to try to ward off Elon Musk before he inevitably purchased the company and took it private. I just don’t think that Carvana has an Elon Musk style buyer out there, but what the hell do I know?
Carvana is still reeling from the drastic turn in the used car market. the long and short of it is that they spent too much to purchase cars (to actually have inventory to sell) and now that prices are dropping, they are essentially upside down on most of their debt and assets. The current plan (as far as I have heard) is to claim all of their 2022 losses on their taxes to help start tackling the debt. That’s a good start, but they have a pretty large hole to dig themselves out of.