Form 4: Carvana Co. Director Ernest C. Garcia II Sells Shares Under 10b5-1 Plan

Director Ernest C. Garcia II and related entities sold Carvana Co. Class A Common Stock between June 18 and June 20, 2024, under a pre-arranged Rule 10b5-1 trading plan.

Summary

• Ernest C. Garcia II, a director and 10% owner of Carvana Co., along with related entities, reported the sale of Class A Common Stock.
• The sales occurred on June 18 and June 20, 2024.
• The transactions were executed under a Rule 10b5-1 trading plan adopted on March 11, 2024.
• On June 18, 2024, Garcia sold 6,600 shares at a weighted average price of $108.5383, 15,655 shares at $109.5688, 22,639 shares at $110.6464, and 15,106 shares at $111.2248.
• On June 20, 2024, Garcia sold 4,180 shares at a weighted average price of $107.0933, 29,256 shares at $108.2236, 14,764 shares at $108.8028, 5,000 shares at $110.1513, 3,500 shares at $111.3379, and 3,300 shares at $112.3825.
• Following these transactions, Garcia directly owns 1,057,500 shares of Class A Common Stock.
• Garcia also indirectly owns shares through Verde Investments, Inc., Ernest Irrevocable 2004 Trust III, Ernest C. Garcia III Multi-Generational Trust III, and ECG II SPE, LLC.
• Garcia directly owns 41,442,317 shares of Class B Common Stock.
• Garcia also indirectly owns Class B Common Stock through the Ernest Irrevocable 2004 Trust III (11,834,021 shares), the Ernest C. Garcia III Multi-Generational Trust III (11,952,000 shares), and ECG II SPE, LLC (8,000,000 shares).

Sentiment

Score: 4

Explanation: The sentiment is neutral to slightly negative. While the sales are under a pre-arranged plan, insider selling can sometimes create negative sentiment, especially if investors are unsure about the reasons behind the sales.

Risks

• The Form 4 filing indicates sales of shares by a director, which could be perceived negatively by investors.
• Continued sales by insiders could put downward pressure on the stock price.

Industry Context

Insider trading activity is always closely watched in the market. Sales by significant shareholders like Ernest Garcia II can sometimes create uncertainty among investors, especially in companies that have experienced volatility.

Comparison to Industry Standards

• Monitoring insider transactions is a standard practice in financial analysis.
• Comparing Garcia's trading activity to that of insiders at similar companies (e.g., other online automotive retailers or companies with similar market capitalization) could provide context.
• Analyzing the percentage of shares sold relative to Garcia's total holdings and the overall trading volume of CVNA can offer insights into the potential impact of these transactions.

Stakeholder Impact

• Shareholders may react to the news of insider selling, potentially impacting the stock price.
• The company's reputation could be affected depending on how the market interprets the insider selling activity.

Key Dates