Carvana’s difficult 2022 continues as shares of the used vehicle retailer fell to their lowest point ever, dipping below $7 per share. As a sell-off continues, the company’s value was down by as much as 24 percent in Monday trading.
The low prices were prompted by an ongoing sell-off that saw more than 9.2 million Carvana shares trading hands in the first 22 minutes of trading. Under normal conditions, just 14 million shares trade hands in the average month, reports CNBC.
Carvana’s shares have been plummeting all year. They reached an all-time high of $376.83 on August 10, 2021, but reached a low of $6.68 per share on Monday, which amounts to a loss of 97 percent. The shares did bounce back from their low point through the day, though, rising above $7.50.
Monday’s sell-off followed a bad Friday, after the company missed expectations for third-quarter performance. The company is struggling as the outlook for used vehicles fall from their record-highs during the pandemic.
The prices of used vehicles at U.S. wholesale auctions have fell 2.2 percent from September to October, and fell by 15.4 percent for the year so far. With retail prices for used vehicles normally following their prices at auction, that’s bad news for Carvana, which bought vehicles in January when prices were peaking and is now trying to sell them at a profit.
Ernie Garcia, Carvana’s CEO, on Thursday said that the next year will be “a difficult one” for the company, citing the normalization of the used vehicle industry. Just the latest difficulty to face the company, it also had its license to sell vehicles in Michigan revoked.
The used car retailer is accused of violating the Michigan Vehicle Code. It allegedly failed to make applications for title and registration within 15 days of delivery, committed fraudulent acts in connection with selling vehicles for which employees admitted to destroying title applications, failed to maintain odometer readings, and improperly issued temporary registrations.
