Insights

Why Carvana Stock Is Bouncing Back Today

What happened 
Shares of Carvana (NYSE: CVNA) were soaring today, likely as some investors viewed the company’s recent sell-off as a new buying opportunity. The investor optimism may be fueled by the fact that former U.S. Vice President and Carvana director, Dan Quayle, purchased more shares of the auto stock recently.
Carvana’s share price was up by 11.2% as of 1:53 p.m. ET. 
So what 
Carvana’s stock has taken a nosedive since the company reported its first-quarter results last month. But yesterday Barron’s reported that Quayle, who has been a Carvana director since 2017, bought nearly 18,750 shares of the company’s stock on May 17. The purchase means that Quayle now owns more than 28,000 shares of Carvana. 
Image source: Getty Images.

Investors like to see when people associated with a company invest their own money in buying its shares because it reinforces the idea that those closest to the company have faith in its future.
As a result, some investors flocked back to Carvana today, causing its share price to spike.
Now what 
While Carvana’s rebound today is certainly good news for shareholders, they may want to be cautious about their enthusiasm. The company still faces significant headwinds right now as soaring inflation and rising interest rates are hurting the automotive retail industry.
Just two weeks ago Carvana laid off about 12% of its workforce as it tries to focus its attention on profitability. That move signals that Carvana is positioning itself for tougher times ahead. 
And as the Fed continues to raise rates this year to tamp down inflation, potentially slower economic growth could cause further pain in the auto market.
Chris Neiger has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. –

What happened 

Shares of Carvana (NYSE: CVNA) were soaring today, likely as some investors viewed the company’s recent sell-off as a new buying opportunity. The investor optimism may be fueled by the fact that former U.S. Vice President and Carvana director, Dan Quayle, purchased more shares of the auto stock recently.

Carvana’s share price was up by 11.2% as of 1:53 p.m. ET. 

So what 

Carvana’s stock has taken a nosedive since the company reported its first-quarter results last month. But yesterday Barron’s reported that Quayle, who has been a Carvana director since 2017, bought nearly 18,750 shares of the company’s stock on May 17. The purchase means that Quayle now owns more than 28,000 shares of Carvana. 

Image source: Getty Images.

Investors like to see when people associated with a company invest their own money in buying its shares because it reinforces the idea that those closest to the company have faith in its future.

As a result, some investors flocked back to Carvana today, causing its share price to spike.

Now what 

While Carvana’s rebound today is certainly good news for shareholders, they may want to be cautious about their enthusiasm. The company still faces significant headwinds right now as soaring inflation and rising interest rates are hurting the automotive retail industry.

Just two weeks ago Carvana laid off about 12% of its workforce as it tries to focus its attention on profitability. That move signals that Carvana is positioning itself for tougher times ahead. 

And as the Fed continues to raise rates this year to tamp down inflation, potentially slower economic growth could cause further pain in the auto market.

Chris Neiger has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

  • This field is for validation purposes and should be left unchanged.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Rebate Rewards

Level 2 Rebate

Deposit $2,000 and get $200 Rebate
$ 200 Rebate
  • 3 Simple Steps
  • 1. Register Using The Link Below (Promo-Code: WEBREBATE)
  • 2. Deposit $2,000 and place one trade at any non-Austalian market within 30 calendar days
  • 3. Receive Your $200 Rebate
Popular

Level 1 Rebate

Deposit $1,000 and get $100 Rebate
$ 100 Rebate
  • 3 Simple Steps
  • 1. Register Using The Link Below (Promo-Code: WEBREBATE)
  • 2. Deposit $1,000 and place one trade at any non-Austalian market within 30 calendar days
  • 3. Receive Your $100 Rebate

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex Securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

EASY QUALIFICATION & LOW ENTRY
NEW CLIENT REBATE OFFER
EARN UP TO $200 CASH REBATE
Act Fast - Promotion Ends In
Click Here To Get Started
EASY QUALIFICATION & LOW ENTRY
NEW CLIENT REBATE OFFER
EARN UP TO $200 CASH REBATE
Act Fast - Promotion Ends In
Click Here For More Info