Form 4: Carvana Director and 10% Owner Sells $33.5 Million in Class A Stock Under 10b5-1 Plan

Ernest C. Garcia II, a director and 10% owner of Carvana Co., reported the sale of 100,000 shares of Class A Common Stock for approximately $33.5 million over two days, following conversions from Class A Units, as part of a pre-arranged trading plan.

Summary

• Ernest C. Garcia II, a director and 10% owner of Carvana Co. (CVNA), reported transactions on July 23, 2025, and July 24, 2025.
• On July 23, 2025, Mr. Garcia converted 62,500 Class A Units of Carvana Group, LLC into 50,000 shares of Carvana Co. Class A Common Stock.
• Immediately following the conversion on July 23, 2025, Mr. Garcia sold all 50,000 newly acquired Class A Common Stock in multiple transactions at weighted average prices ranging from $332.5493 to $341.2471, totaling approximately $16.8 million.
• In connection with the conversion on July 23, 2025, 50,000 shares of Class B Common Stock were cancelled for no consideration.
• On July 24, 2025, Mr. Garcia converted another 62,500 Class A Units into 50,000 shares of Carvana Co. Class A Common Stock.
• Immediately following the conversion on July 24, 2025, Mr. Garcia sold all 50,000 newly acquired Class A Common Stock in multiple transactions at weighted average prices ranging from $329.0576 to $341.7838, totaling approximately $16.7 million.
• In connection with the conversion on July 24, 2025, another 50,000 shares of Class B Common Stock were cancelled for no consideration.
• All sales were conducted pursuant to a Rule 10b5-1 trading plan adopted by Ernest C. Garcia II and Elizabeth Joanne Garcia on December 13, 2024.
• Following these transactions, Mr. Garcia directly holds 0 Class A Common Stock, 35,542,792 Class B Common Stock, and 44,428,489 Class A Units.
• ECG II SPE, LLC, an entity wholly owned and controlled by Mr. Garcia, indirectly holds 8,000,000 Class B Common Stock and 10,000,000 Class A Units (exchangeable for 0.8 Class A Shares).

Sentiment

Score: 3

Explanation: The sentiment is negative due to significant insider selling by a director and 10% owner. While the sales were pre-planned under a 10b5-1 plan, the substantial volume of shares sold by a key insider typically signals a reduction in direct equity exposure, which can be interpreted as a bearish indicator by investors.

Negatives

• A director and 10% owner, Ernest C. Garcia II, sold a significant volume of 100,000 Class A Common Stock over two days.
• The sales represent a reduction in direct equity exposure by a key insider, which can be perceived negatively by the market.

Risks

• Significant insider selling, even under a pre-arranged plan, may signal a lack of confidence in future stock price appreciation or a desire to diversify holdings, potentially impacting investor sentiment.

Future Outlook

NA

Industry Context

NA

Related Party Transactions

• The reported transactions involve Ernest C. Garcia II, a director and 10% owner of Carvana Co., converting Class A Units into Class A Common Stock and subsequently selling those shares. These are considered related-party transactions due to Mr. Garcia's significant role and ownership stake in the company.

Stakeholder Impact

• Shareholders: The significant insider selling by a director and 10% owner may lead to negative investor sentiment and potentially downward pressure on the stock price, as it could be interpreted as a signal of reduced confidence or a move to take profits at current valuations.

Key Dates

Recommendation

The filing reports substantial insider selling by Ernest C. Garcia II, a director and 10% owner, who disposed of 100,000 shares of Class A Common Stock. While these sales were executed under a pre-arranged 10b5-1 trading plan, the sheer volume and the fact that a major insider is reducing their direct equity exposure is generally viewed as a bearish signal. For a seasoned investor, this indicates that a key stakeholder is monetizing a significant portion of their holdings, suggesting caution or a potential opportunity to take profits rather than initiate new positions. Therefore, a 'sell' recommendation is warranted to reflect the negative signal from this insider activity.

Keywords

Carvana, CVNA, Insider Trading, SEC Form 4, Stock Sales, 10b5-1 Plan, Ernest C. Garcia II, Class A Common Stock, Class B Common Stock, Class A Units