Why Carvana Stock Crashed Today
Shares of Carvana (NYSE: CVNA) were down by close to 35% as of 11:40 a.m. ET on Wednesday after Wedbush analyst Seth Basham downgraded the stock to underperform over the company's bankruptcy risk.
A weak environment for vehicle sales has put pressure on the company's financials this year, causing the stock to fall sharply, and investors don't see an easy way for Carvana to steer its way out of this mess.
Basham's downgrade came after Bloomberg broke the news late Tuesday that a group of creditors holding the majority of Carvana's debt have joined together to negotiate with the company. The analyst believes a debt restructuring will leave the stock worthless in a bankruptcy situation.
Source Fool.com
