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

Ernest C. Garcia II, a director and 10% owner of Carvana Co., sold shares of Class A Common Stock on May 22 and 23, 2024, under a pre-arranged Rule 10b5-1 trading plan.

Summary

• Ernest C. Garcia II, a director and 10% owner of Carvana Co., reported the sale of Class A Common Stock on May 22 and 23, 2024.
• The sales were executed under a Rule 10b5-1 trading plan adopted on March 11, 2024.
• On May 22, 2024, Garcia sold 28,343 shares at a weighted average price of $115.1157, 23,082 shares at $116.0391, 6,075 shares at $117.0343, and 2,500 shares at $117.8096.
• On May 23, 2024, Garcia sold 12,843 shares at a weighted average price of $109.3042, 5,651 shares at $110.4299, 10,278 shares at $111.5281, 11,200 shares at $112.2809, 6,128 shares at $113.3531, 7,600 shares at $114.5475, and 6,300 shares at $115.3015.
• Following these transactions, Garcia directly owns 2,137,500 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.
• He also directly owns 41,442,317 shares of Class B Common Stock.
• Additionally, Garcia indirectly owns Class B Common Stock through the Ernest Irrevocable 2004 Trust III (11,834,021 shares) and the Ernest C. Garcia III Multi-Generational Trust III (11,952,000 shares), and ECG II SPE, LLC (8,000,000 shares).
• Garcia also holds Class A Units exchangeable for Class A Common Stock through various entities.

Sentiment

Score: 5

Explanation: The sentiment is neutral. The filing simply reports transactions under a pre-existing trading plan. There's no inherent positive or negative information, but the market's reaction could vary.

Negatives

• The sales by a director and significant shareholder could be interpreted negatively by the market, although they were pre-planned.

Risks

• Continued sales by insiders could put downward pressure on the stock price.
• The market may react negatively to the perception of insider selling, even if pre-planned.

Future Outlook

The document does not provide specific forward-looking statements, but the Rule 10b5-1 trading plan suggests continued sales may occur.

Industry Context

Insider sales are common and often pre-planned, but investors often monitor them closely for signals about management's confidence in the company's future prospects. The sales are under a 10b5-1 plan, which is intended to reduce concerns about trading on inside information.

Comparison to Industry Standards

• It's difficult to compare these transactions directly to industry standards without knowing the specific motivations behind the sales.
• However, insider sales are a common occurrence in publicly traded companies, and the use of a 10b5-1 plan is a standard practice to ensure compliance with securities laws.
• Comparable companies would include other publicly traded automotive retailers or e-commerce platforms, but their insider trading activity would need to be examined on a case-by-case basis.

Stakeholder Impact

• The sales could have a minor negative impact on shareholder sentiment in the short term.
• The impact on other stakeholders (employees, customers, suppliers, creditors) is likely to be minimal.

Key Dates