The father-son duo behind Carvana Co. has been reaping profits from the online used-car dealer’s share rebound.
The elder Ernie Garcia II, a major shareholder and the wealthier of the two, sold nearly 1.3 million shares worth $145 million in May. That’s the biggest monthly dollar amount since August 2021, when he sold over $329 million worth of stock near its pandemic-fueled all-time high — and the most shares he’s unloaded since December 2020.
His son, Carvana co-founder and Chief Executive Officer Ernie Garcia III, sold 18,100 shares worth $2.1 million in May, the biggest monthly total in over three years.
The calculation of stock sales is based on company filings as of Friday and may not reflect all sales in May.
Carvana shares rebounded sharply last month after the company reported an unexpected quarterly profit with revenue topping analysts’ expectations. That boosted the Garcias’ combined net worth by more than $11 billion from a low in December 2022.
The stock ended May up 21%, even after paring some gains in the latter half of the month. Carvana didn’t immediately respond to a request for comment.
It’s not the first time the family has profited from a rising stock price. As Carvana shares peaked in 2021, driven by used-car buyers flush with stimulus money and low-interest loans, the elder Garcia sold about 8 million shares that year, netting $2.3 billion.
Read More: Carvana Asks Bondholders to Take Big Hit to Cut $8 Billion Debt
But rising interest rates and mounting debt soon sent the company’s stock — and the Garcias’ fortunes — into a steep spiral, resulting in cutbacks on ad spending and vehicle inventory. The online retailer grew vehicle sales in the first three months of 2024 for the first time in six quarters, pushing revenue to $3.1 billion.
Read More: Carvana CEO Sees Used Car Sales Improving on New Vehicle Glut
Garcia III joined DriveTime, his father’s company, in 2007 after earning an engineering degree from Stanford University. He helped the company develop tools to assess consumer credit, set vehicle prices and structure deals, according to a Carvana biography. Carvana was founded as a subsidiary of DriveTime in 2012 and went public in 2017.
The younger Garcia derives his wealth mainly from his $3 billion stake in Carvana, according to the Bloomberg Billionaires Index, while his 67-year-old father has a $5.5 billion stake in the used-car dealer. The older Garcia is the 234th-richest person in the world with a fortune of $10.1 billion, while his son’s net worth is $3.3 billion.
The Garcia family holds 87% of Carvana’s voting power and can determine the outcome of all matters requiring shareholder approval, which could affect the stock price and conflict with the interests of other shareholders, according to the company’s 2023 annual report.
With assistance from David Welch.
This article was generated from an automated news agency feed without modifications to text.
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Published: 03 Jun 2024, 11:58 PM IST