Form 4: Carvana Director Ernest Garcia II Executes Significant Stock Sales Under Pre-Arranged 10b5-1 Plan

Carvana Co. Director and 10% owner Ernest C. Garcia II converted Class A Units into Class A Common Stock and subsequently sold 100,000 shares over two days in early July 2025, pursuant to a Rule 10b5-1 trading plan.

Summary

• Ernest C. Garcia II, a Director and 10% owner of Carvana Co. (CVNA), engaged in significant stock transactions on July 2 and July 3, 2025.
• On July 2, 2025, Garcia converted 50,000 Class A Common Units of Carvana Group, LLC into 50,000 shares of Carvana Co. Class A Common Stock.
• Immediately following the conversion on July 2, 2025, Garcia sold all 50,000 newly acquired Class A Common Stock shares at weighted average prices ranging from $337.563 to $342.4272.
• Concurrently with the July 2 conversion, 50,000 shares of Class B Common Stock were cancelled for no consideration.
• On July 3, 2025, Garcia again converted 50,000 Class A Common Units of Carvana Group, LLC into 50,000 shares of Carvana Co. Class A Common Stock.
• Following the conversion on July 3, 2025, Garcia sold all 50,000 newly acquired Class A Common Stock shares at weighted average prices ranging from $339.1182 to $345.1281.
• Another 50,000 shares of Class B Common Stock were cancelled for no consideration in connection with the July 3 conversion.
• 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, Ernest C. Garcia II directly owns 36,637,346 Class B Common Stock shares and 45,796,681 Class A Units.
• ECG II SPE, LLC, an entity wholly owned and controlled by Mr. Garcia, indirectly owns 8,000,000 Class B Common Stock shares and 10,000,000 Class A Units.

Sentiment

Score: 4

Explanation: The sentiment is slightly negative due to the significant volume of insider selling, even though it was conducted under a pre-arranged 10b5-1 plan. While planned, large insider sales can still be perceived by the market as a lack of strong conviction or a signal that the stock is fully valued.

Positives

• The sales were executed under a pre-arranged Rule 10b5-1 trading plan, indicating a scheduled transaction rather than a reaction to new, negative information.
• The conversion of Class A Units to Class A Common Stock increases the float of publicly tradable shares, potentially enhancing market liquidity.

Negatives

• Significant insider selling, totaling 100,000 shares of Class A Common Stock over two days, can be perceived by the market as a negative signal regarding management's confidence or the stock's valuation.
• The transactions resulted in a reduction of direct Class A Common Stock holdings by a key insider.

Future Outlook

The document does not provide any forward-looking statements or guidance regarding the company's future performance or strategic direction.

Industry Context

This Form 4 filing reports routine insider transactions and does not provide broader industry context or trends. It reflects an individual's pre-planned stock sales rather than a company-wide strategic announcement.

Related Party Transactions

• The conversion of Class A Common Units of Carvana Group, LLC into Class A Common Stock of Carvana Co. is a transaction between related entities, as Carvana Group is related to the Issuer through the Exchange Agreement.
• The transactions involve Ernest C. Garcia II, a Director and 10% owner, and ECG II SPE, LLC, an entity wholly owned and controlled by Mr. Garcia, making these related party dealings.

Stakeholder Impact

• Shareholders may interpret the significant insider selling as a signal regarding the insider's view on the company's future prospects or stock valuation, potentially influencing investor sentiment and trading decisions.

Key Dates

Keywords

Carvana, CVNA, Insider Trading, Form 4, Stock Sale, Equity Conversion, Ernest C. Garcia II, 10b5-1 Plan, Beneficial Ownership, Class A Common Stock, Class B Common Stock, Class A Units