The company is currently in the "middle of step two" of a three-step restructuring plan, which includes driving the business to significant positive unit economics, including positive free cash flow, and returning to growth. Carvana has also introduced new tech to optimize operations, including a suite of tools that records inspections and reconditioning of inbound vehicles step by step. Despite the successful restructuring, concerns remain over the Garcia family's control of the company and its close ties with other Garcia-owned companies.
Key takeaways:
- Carvana has successfully restructured its operations and debt amid bankruptcy concerns, with its stock rising from less than $5 per share to more than $55 at the beginning of 2024.
- The company has taken $1.1 billion of annualized expenses out of the business, reduced headcounts by more than 4,000 people, and launched a new proprietary software platform for end-to-end processing of vehicle reconditioning.
- Carvana is currently in the "middle of step two" of a three-step restructuring that includes driving the business to break even on an adjusted EBITDA basis, driving the business to significant positive unit economics, and returning to growth.
- Despite the successful restructuring, concerns remain about the Garcia family's control of the company and its close ties with other Garcia-owned or -controlled companies, including DriveTime.