Carvana Adopts "Poison Pill": What It Means for Investors
On Jan. 17, the management team for online used car retailer Carvana (NYSE: CVNA) adopted what it calls its "Tax Asset Preservation Plan." In the investing world, such an action is more commonly called a "poison pill," because the plan is structured to prevent anyone new from owning too much Carvana stock.
Let's look at how this asset preservation plan works, why Carvana is making the change, and what it could mean for shareholders or potential shareholders.
Anyone who follows Carvana's business knows it has substantial operating losses. These losses are a big reason why the stock price is down 98% from its all-time high.
Source Fool.com