Carvana's Woes Deepen as Investors Dump Debt

The video discusses Carvana's financial struggles, highlighting its stock decline and debt issues. Once a pandemic success story, Carvana now faces challenges due to its reliance on debt markets and the subsequent economic downturn. The company is exploring options like debt swaps to manage its financial obligations. The broader implications for credit markets and investors are also considered.

What was one of the main reasons Carvana benefited during the pandemic?

• Increased demand for in-person shopping

• Reduction in supply chain issues

• Decrease in online shopping

• Rising car prices and accessible debt markets

Why are bondholders particularly worried about Carvana's financial situation?

• Carvana has no debt

• The stock price is increasing

• The bonds are trading above $1.00 on the dollar

• Carvana's bonds are trading below $0.50 on the dollar

What is one potential strategy Carvana might use to manage its debt?

• Issuing more equity

• A debt swap or up-tiering exchange

• Reducing marketing expenses

• Increasing car prices

How much did Carvana burn in two quarters as part of its growth strategy?

• $1 billion

• $2 billion

• $3 billion

• $500 million

What is one of the assets Carvana might monetize to manage its financial situation?

• Retail stores

• Unencumbered real estate

• Cryptocurrency holdings

• Luxury vehicles