Carvana Stock Falls Short On First Day Of IPO

Carvana Co., a leading eCommerce platform for buying used cars, saw its shares fall 16 percent on the first day of its initial public offering (IPO). According to Barron’s, the stock was down $2.33, or almost 16 percent, at $12.67, below its IPO price of $15.

Founded in 2012, the Phoenix-based company sells cars through its website and operates automated towers that store cars in U.S. cities, such as Austin and Dallas in Texas and Nashville, Tennessee. Carvana made $342 million in revenue when the year ended in December, but its net loss, $93 million, also rose, up 153 percent.

Carvana announced last week in a press release that it was releasing 15 million shares of its Class A common stock at a price to the public of $15 per share under the symbol “CVNA.” The offering is expected to close on May 3, 2017, subject to customary closing conditions. The company has granted the underwriters a 30-day option to purchase up to 2.25 million additional shares of Class A common stock.

Wells Fargo Securities, LLC, Bank of America Merrill Lynch, Citigroup Global Markets, Inc. and Deutsche Bank Securities, Inc. are acting as joint book-running managers for the offering. Robert W. Baird & Co., Inc., William Blair & Company, LLC, BMO Capital Markets Corp. and JMP Securities, LLC are acting as co-managers.

“I think all the financial metrics are born of the other things, such as the user experience that we focus on,” Carvana CEO Ernie Garcia told Barron’s. “We grew revenue 187 percent last year; that’s because of the focus on the customer experience. You work on what is impacting your consumer — you focus on that and improve that — and then all the metrics come out of that.”


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