Form 4: Carvana Director Ernest Garcia II Sells $32.5 Million in Class A Stock Under Pre-Arranged Trading Plan

Carvana Co. Director and 10% owner Ernest C. Garcia II sold 100,000 shares of Class A Common Stock for approximately $32.5 million in late May and early June 2025, pursuant to a Rule 10b5-1 trading plan.

Summary

• Ernest C. Garcia II, a Director and 10% owner of Carvana Co., executed sales of Class A Common Stock on May 30, 2025, and June 2, 2025.
• On May 30, 2025, Mr. Garcia converted 50,000 Class A Units into 50,000 Class A Common Stock and subsequently sold all 50,000 shares at a weighted average price of $325.1554, totaling approximately $16,257,770.
• On June 2, 2025, he converted another 50,000 Class A Units into 50,000 Class A Common Stock and sold all 50,000 shares in multiple transactions at weighted average prices ranging from $325.5556 to $328.2221, totaling approximately $16,329,500.
• The total proceeds from these sales amount to approximately $32,587,270.
• In connection with these conversions, 100,000 shares of Class B Common Stock were cancelled for no consideration.
• All reported sales were conducted under a Rule 10b5-1 trading plan adopted on December 13, 2024.
• Following these transactions, Mr. Garcia directly holds 37,342,317 Class B Common Stock and 46,677,895 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 8,000,000 Class A Shares).

Sentiment

Score: 4

Explanation: While the sales were pre-planned under a 10b5-1 plan, significant insider selling by a director and 10% owner can still be perceived with caution by investors, potentially leading to negative sentiment, even if it's for personal financial planning or diversification.

Positives

• The sales were executed under a pre-arranged Rule 10b5-1 trading plan, indicating a planned liquidity event rather than a reactive sale based on new, undisclosed information.

Negatives

• Significant insider selling by a key executive and major shareholder (10% owner) could be perceived negatively by some investors, potentially signaling a lack of confidence or a desire to diversify holdings.

Future Outlook

This Form 4 filing does not contain any forward-looking statements or guidance regarding Carvana Co.'s future performance or outlook.

Management Comments

• The sales reported on this Form 4 were effected pursuant to a Rule 10b5-1 trading plan adopted by Ernest C. Garcia II and Elizabeth Joanne Garcia on December 13, 2024.

Industry Context

This filing reports an insider stock transaction and does not provide information related to broader industry trends or Carvana's competitive position within the automotive retail sector. However, significant insider sales, even pre-planned, are often scrutinized by market participants for potential signals about the company's future prospects or the insider's personal financial planning.

Related Party Transactions

• The transactions involve Ernest C. Garcia II, a director and 10% owner of Carvana Co., and ECG II SPE, LLC, an entity wholly owned and controlled by Mr. Garcia, making them related party transactions.

Stakeholder Impact

• Shareholders may interpret the significant insider selling as a signal, potentially influencing their investment decisions, although the 10b5-1 plan mitigates immediate concerns about undisclosed negative information.
• The transactions do not directly impact employees, customers, suppliers, or creditors as they relate to personal stock ownership changes of a key executive.

Next Steps

• The document does not outline any specific future actions, events, or milestones for Carvana Co. beyond the reporting of these completed transactions.

Key Dates

Recommendation

Keywords

Carvana, CVNA, SEC Form 4, Insider Trading, Stock Sale, Ernest C. Garcia II, Rule 10b5-1, Beneficial Ownership, Equity Transaction, Director Sale, 10% Owner