Here's How Carvana Will Start Making Profits
A lot of fast-growing stocks have taken a big hit in 2022, and Carvana (NYSE: CVNA) was no exception. In response, the company made several changes, including layoffs in the first quarter, and it took on additional debt to build out car inventory and give management more flexibility. Wall Street wasn't impressed, and several hedge funds began shorting the company. The stock is now trading down about 94% from highs set last August.
My family has owned shares in Carvana for several years now. With the drop, we went from having a nice 10-bagger in the stock to seeing our investment go underwater. Has this drop scared me off the stock? Not really. The stock had a mighty drop in early 2020, too, at the start of the pandemic but then skyrocketed higher. I've come to see Carvana as a battleground stock that's likely to have a huge short position for some time, making for a very volatile investment.
But I think this is an outstanding company, and I remain very bullish. Let's take a look at the bear case, and see why it hasn't dissuaded me from my optimism about Carvana stock.
Source Fool.com
