Why Carvana Tanked 33.6% in March
Shares of Carvana (NYSE: CVNA) tanked 33.6% last month, according to data from S&P Global Market Intelligence.
It's clear that the huge move in Carvana's stock price last month was driven by the U.S. coronavirus outbreak. With initial unemployment claims soaring to over 3.3 million during the week ending March 21, and then to 6.6 million during the week ending March 28, there are certainly fewer people who would consider buying a car today than a month or two ago.
What exacerbated the downturn in Carvana's shares was the company's relatively weak balance sheet and high cash burn rate. As of the end of last year, Carvana's balance sheet included $932 million in debt and just $76 million in cash, while the company reported negative-$988 million of free cash flow last year.
Source Fool.com
