Form 4: Carvana Director Ernest Garcia II Sells $52 Million in Stock Following Unit Conversions

Carvana Co. Director and 10% owner Ernest C. Garcia II converted Class A Units into Class A Common Stock and subsequently sold 150,000 shares for approximately $52 million under a pre-arranged trading plan.

Summary

• Ernest C. Garcia II, a Director and 10% owner of Carvana Co., converted 150,000 Class A Common Units of Carvana Group, LLC into 150,000 shares of Carvana Co. Class A Common Stock across two days.
• On July 17, 2025, 100,000 Class A Units were converted into 100,000 Class A Common Stock, followed by the sale of all 100,000 shares at weighted average prices ranging from $345.4488 to $358.3539.
• On July 18, 2025, an additional 50,000 Class A Units were converted into 50,000 Class A Common Stock, and all 50,000 shares were subsequently sold at weighted average prices ranging from $337.2159 to $349.25.
• The sales were executed pursuant to a Rule 10b5-1 trading plan adopted by Ernest C. Garcia II and Elizabeth Joanne Garcia on December 13, 2024.
• In connection with these conversions, 150,000 shares of Class B Common Stock were cancelled for no consideration.
• Following these transactions, Ernest C. Garcia II directly holds 0 Class A Common Stock and 35,742,792 Class B Common Stock.
• 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: 4

Explanation: The sentiment is moderately negative due to significant insider selling by a key executive and major shareholder. While the sales were pre-planned under a 10b5-1 plan, the sheer volume of shares sold (150,000) can still be interpreted by the market as a lack of strong conviction in the near-term stock performance, or a move to diversify a large holding.

Positives

• The sales were pre-planned under a Rule 10b5-1 plan, which suggests the transactions were not based on immediate, non-public information.

Negatives

• Significant insider selling by a director and 10% owner, totaling 150,000 shares, could be perceived negatively by the market.

Risks

• Large insider sales, even if pre-planned, can sometimes be interpreted by investors as a lack of confidence in the company's future prospects, potentially leading to downward pressure on the stock price.

Future Outlook

NA

Industry Context

NA

Related Party Transactions

• The conversion of Class A Common Units of Carvana Group, LLC into Class A Common Stock of Carvana Co. by Ernest C. Garcia II, a 10% owner and director, and the subsequent cancellation of Class B Common Stock, are transactions involving entities and share classes closely tied to the reporting person's ownership structure.

Stakeholder Impact

• Shareholders may interpret the significant insider selling as a signal regarding the company's future prospects, potentially influencing their investment decisions.
• The transactions do not directly impact employees, customers, suppliers, or creditors.

Key Dates

Recommendation

Keywords

Carvana Co., CVNA, Ernest C. Garcia II, Insider Trading, Form 4, Stock Sale, Class A Common Stock, Class B Common Stock, Rule 10b5-1, SEC Filing, Ownership Change, Director Transactions