Carvana Co. shares tumbled after the used-car retailer gave investors a day’s notice that it was moving up its release of quarterly earnings.
(Bloomberg) — Carvana Co. shares tumbled after the used-car retailer gave investors a day’s notice that it was moving up its release of quarterly earnings.
The company said late Tuesday that it will report results before the market opens Wednesday, more than a month earlier than previously planned. Its shares slumped as much as 10% in premarket trading.
Carvana has been struggling with sizable debt and a correction in used-car prices, sending the company’s market value plunging about 90% from its peak two years ago. While executives said in early June that operations were improving, interest expense of more than $2,000 per car was a major reason the company reported a $286 million first-quarter loss.
The Tempe, Arizona-based company canceled a $1 billion debt swap last month after a group of creditors refused to exchange their notes. Debt holders including Apollo Global Management Inc. and Pacific Investment Management Co., who banded together last year in preparation for a restructuring, opposed the debt exchange when the company first launched it in March.
Carvana has managed to slow cash burn “materially” by cutting costs and taking advantage of resilient used-car prices, JPMorgan analyst Rajat Gupta said in a report last week. He downgraded the stock to the equivalent of a sell rating, citing their recovery since early May, and suggested the company should consider selling shares to pay down debt.
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