A Billionaire’s Bold Move: Ernie Garcia II Cash Out $1.4 Billion in Carvana Stock
Ernie Garcia II, the father of Carvana Co.’s CEO Ernest Garcia III, has made a stunning move, selling off $1.4 billion worth of the online auto retailer’s stock since April. This bold decision has left many wondering what’s behind it.
A Fortune Worth $17.6 Billion
Garcia II’s net worth has skyrocketed to $17.6 billion, thanks largely to his Carvana stake. In fact, his wealth has increased by a staggering $10.3 billion this year alone. The 67-year-old billionaire’s decision to offload Carvana shares may be a strategic move to diversify his holdings and capitalize on the company’s remarkable comeback.
A Remarkable Comeback
Carvana’s shares have made a dramatic recovery, surging from less than $4 at the end of 2022 to around $240 today. This rally has been driven by a successful restructuring that boosted sales and slashed costs. Even skeptics have been impressed, with Morgan Stanley analyst Adam Jonas recently upgrading Carvana to a hold from sell, praising the company’s “outstanding execution.”
Diversifying Holdings
Garcia II’s sale of 9.9 million shares, at an average price of around $140, represents a significant portion of his Carvana stake. He purchased these shares in 2022 and 2023 for about $53 apiece, according to securities filings. By selling these shares, Garcia II is diversifying his holdings and cashing in on Carvana’s rally.
A Family Affair
The Garcia family has a significant stake in Carvana, with Ernie Garcia III, the CEO, and his father collectively controlling 92% of Class B shares. This gives them more than 80% voting control over the company. While Garcia III sold $2.1 million worth of stock in May, he has not disposed of any since then.
What’s Next?
Garcia II’s sales have sparked speculation about whether he suspects the shares have peaked again. Some experts believe he may be diversifying his investments or preparing for a potential downturn. One thing is certain – the billionaire’s move has sent ripples through the market, leaving investors wondering what’s next for Carvana.
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