Carvana shares plummet as creditors look to renegotiate debt financing - Phoenix Business Journal

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Carvana shares have been under severe pressure since early November when a slew of analysts downgraded the stock. phoenix $CVNA

By Phoenix Business Journal staffCarvana Co.’s stock tanked on Wednesday on news that the beleaguered used car retailer’s largest creditors are reportedly banding together to negotiate with the company as bankruptcy risks grow.that a group of funds, with around $4 billion in Tempe-based Carvana’s unsecured debt, including Apollo Global Management Inc. and Pacific Investment Management Co.

This type of agreement can help prevent a company from trying to pit lenders against each other while negotiating terms of the restructuring, the report said. Adding fuel to the selloff that began when the markets opened Wednesday, a Wedbush Securities analyst downgraded the company’s stock to underperform because of the potential risk for bankruptcy,Analyst Seth Basham set a price target of $1 on Carvana shares. That is a far cry from the price of Carvana shares at the beginning of 2022, when the stock traded above $230.

On Wednesday, Carvana shares closed at $3.83, down 43% for the session, having dipped as low as $3.55 earlier in the day. Trading in the shares was extremely heavy as more than 116 million shares changed hands compared to typical daily volume for the stock of 15.5 million shares.

 

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