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Carvana to cut 1,500 jobs as online auto dealer’s troubles mount

bloomberg.com

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Re: Carvana to cut 1,500 jobs as online auto dealer’s troubles mount

#3

Post by wcunning »

This is less of a tech layoff story and more of an overlevered business with crashing asset values against very difficult short term liabilities and no ability to refinance in a rising interest rate market. The real question for normal people is if Carvana sells off a huge chunk of its inventory at fire-sale prices, does that accelerate the crash in used car prices? Is March of 2023 the right time to pick up that fun sports car since it'll be super affordable?

Re: Carvana to cut 1,500 jobs as online auto dealer’s troubles mount

#4

Post by shaburn »

wcunning wrote: post #3

This is less of a tech layoff story and more of an overlevered business with crashing asset values against very difficult short term liabilities and no ability to refinance in a rising interest rate market. The real question for normal people is if Carvana sells off a huge chunk of its inventory at fire-sale prices, does that accelerate the crash in used car prices? Is March of 2023 the right time to pick up that fun…

Yes.

Re: Carvana to cut 1,500 jobs as online auto dealer’s troubles mount

#6

Post by celestialcheese »

wcunning wrote: post #3

This is less of a tech layoff story and more of an overlevered business with crashing asset values against very difficult short term liabilities and no ability to refinance in a rising interest rate market. The real question for normal people is if Carvana sells off a huge chunk of its inventory at fire-sale prices, does that accelerate the crash in used car prices? Is March of 2023 the right time to pick up that fun…

Probably more like July.

It's going to take a long time for these loans to get liquidated, and then processed through the repo markets.

And likely the lenders will hold the repo'd asset longer if they can to not create a glut of vehicles. The way this really get's great for buying repo'd sports cars is if we get forced liquidations from the lenders.

It's going to be a bloodbath.

Re: Carvana to cut 1,500 jobs as online auto dealer’s troubles mount

#7

Post by nfriedly »

celestialcheese wrote: post #6
wcunning wrote: post #3

This is less of a tech layoff story and more of an overlevered business with crashing asset values against very difficult short term liabilities and no ability to refinance in a rising interest rate market. The real question for normal people is if Carvana sells off a huge chunk of its inventory at fire-sale prices, does that accelerate the crash in used car prices? Is March of 2023 the right time to pick up that fun…

Probably more like July. It's going to take a long time for these loans to get liquidated, and then processed through the repo markets. And likely the lenders will hold the repo'd asset longer if they can to not create a glut of vehicles. The way this really get's great for buying repo'd sports cars is if we get forced liquidations from the lenders. It's going to be a bloodbath.

According to some video I saw on YouTube, there's already a large number of repossessed vehicles that banks are being very slow to release to the market, because they want to keep the prices high.

Re: Carvana to cut 1,500 jobs as online auto dealer’s troubles mount

#8

Post by xnx »

wcunning wrote: post #3

This is less of a tech layoff story and more of an overlevered business with crashing asset values against very difficult short term liabilities and no ability to refinance in a rising interest rate market. The real question for normal people is if Carvana sells off a huge chunk of its inventory at fire-sale prices, does that accelerate the crash in used car prices? Is March of 2023 the right time to pick up that fun…

Any reason those cars wouldn't sell at the going (probably high) used car rate at the time? e.g. https://publish.manheim.com/content/dam/consulting/ManheimUs...
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