Short Carvana
Updated
Carvana offers an online platform to comfortably browse and buy used cars from, with delivery and 7d test drive money back guarantee.
The argument has been made that this form of selling will outperform in person buying from car dealership during COVID.
However, with strong decline in car sales globally and the entire sector suffering heavily in this environment, Carvana has remained relatively unchanged to its pre-COVID levels.
At such high unemployment numbers and bad economic outlook, it is questionable that they can sustain their growth, which seems to be the core pillar of its evaluation.
Additionally, this is not a Tech company, but seems to be traded as such.
Their platform is a digital product, but the core business and stream of revenue is buying and selling of used cars, which has very slim margins.
The core idea is great, but its evaluation way too high in this environment.
The stock is very volatile. Looking to enter near previous resistance levels at around 99$-100$.
The argument has been made that this form of selling will outperform in person buying from car dealership during COVID.
However, with strong decline in car sales globally and the entire sector suffering heavily in this environment, Carvana has remained relatively unchanged to its pre-COVID levels.
At such high unemployment numbers and bad economic outlook, it is questionable that they can sustain their growth, which seems to be the core pillar of its evaluation.
Additionally, this is not a Tech company, but seems to be traded as such.
Their platform is a digital product, but the core business and stream of revenue is buying and selling of used cars, which has very slim margins.
The core idea is great, but its evaluation way too high in this environment.
The stock is very volatile. Looking to enter near previous resistance levels at around 99$-100$.
Note
more bearish news: additional share offering and their biggest competitor Vroom filing for an IPO, looking good so far.
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