Investing

Morgan Stanley Doubles Carvana Stake as Debt Restructuring Likliehood Rises

Fintel Staff

Published: December 9, 2022 3:04 am

Last Updated: December 9, 2022 12:08 pm

Morgan Stanley filed a 13G/A form with the SEC on Wednesday, revealing it doubled its Carvana Co (CVNA) stake to 13.1 million shares or 12.4% as the stock tumbled more than 40%.

Shares hit a new low on Wednesday, trading down 43% at $3.85 a share. The shares have lost 99% of their value since August 2021.

Wedbush analyst Seth Basham helped spark the rout when he published a research report questioning the company’s viability after reports its creditors teamed up to ponder a debt restructuring.

Basham said a debt workout created the “likelihood of debt restructuring that could leave the equity worthless in a bankruptcy scenario … or highly diluted in a best case.”

In their filing dated Feb. 10, 2022, they reported 5,303,437 shares and 6.20% of the company, an increase in shares of 147.26% and an increase in total ownership of 6.20% (calculated as current – previous percent ownership).

Founded in 2012 and based in Phoenix, Carvana’s mission is to change how people buy cars. Carvana offers consumers an intuitive and convenient online car buying and financing platform by removing the traditional dealership infrastructure and replacing it with technology and exceptional customer service. Carvana.com enables consumers to quickly and easily shop more than 20,000 vehicles, finance, trade-in or sell their current vehicle to Carvana, sign contracts, and schedule as-soon-as-next-day delivery or pickup at one of Carvana’s patented, automated Car Vending Machines.

What are other large shareholders doing?

Price T Rowe Associates Inc /md/ holds 19,613,733 shares representing 18.51% ownership of the company. In its prior filing, the firm reported owning 20,100,843 shares, representing a decrease of 2.48%. The firm increased its portfolio allocation in CVNA by 14.02% over the last quarter.

Baillie Gifford & Co holds 14,144,058 shares representing 13.35% ownership of the company. In its prior filing, the firm reported owning 10,901,629 shares, representing an increase of 22.92%. The firm increased its portfolio allocation in CVNA by 17.26% over the last quarter.

CAS Investment Partners, LLC holds 6,827,803 shares representing 6.44% ownership of the company. In its prior filing, the firm reported owning 6,727,803 shares, representing an increase of 1.46%. The firm increased its portfolio allocation in CVNA by 9.85% over the last quarter.

Spruce House Investment Management LLC holds 6,550,000 shares representing 6.18% ownership of the company. In its prior filing, the firm reported owning 6,150,000 shares, representing an increase of 6.11%. The firm increased its portfolio allocation in CVNA by 19.58% over the last quarter.

Capital World Investors holds 5,318,506 shares representing 5.02% ownership of the company. In its prior filing, the firm reported owning 1,616,536 shares, representing an increase of 69.61%. The firm increased its portfolio allocation in CVNA by 212.60% over the last quarter.

What is the overall Fund Sentiment?

There are 631 funds or institutions reporting positions in Carvana Co. This is a decrease of 94 owner(s) or 12.97%.

Average portfolio weight of all funds dedicated to Carvana Co is 0.4307%, an increase of 19.0806%. Total shares owned by institutions increased in the last three months by 6.31% to 139,699,526 shares.

Fintel’s Fund Sentiment Score is a quantitative model that ranks companies from zero to 100 based on Fund Sentiment. Fund Sentiment is important because it tells you if funds are buying or selling – and, in particular how the company ranks compared to other companies in the investing universe.

Click to see the Fintel Fund Sentiment Score for CVNA / Carvana Co.

This article originally appeared on Fintel