Form 4: Carvana Director Ernest Garcia II Sells Nearly 100,000 Shares Under Pre-Arranged Trading Plan

Carvana Co.'s 10% owner and director, Ernest C. Garcia II, sold a total of 99,000 Class A Common Stock shares over two days in early June 2025, pursuant to a Rule 10b5-1 trading plan.

Summary

• Ernest C. Garcia II, a Director and 10% Owner of Carvana Co. (CVNA), reported transactions involving the conversion and sale of company stock.
• On June 3, 2025, Mr. Garcia converted 62,500 Class A Units of Carvana Group, LLC into 50,000 shares of Carvana Co. Class A Common Stock.
• Concurrently on June 3, 2025, he sold a total of 49,000 Class A Common Stock shares at weighted average prices ranging from $332.7672 to $337.4842.
• On June 4, 2025, Mr. Garcia again converted 62,500 Class A Units into another 50,000 shares of Carvana Co. Class A Common Stock.
• Also on June 4, 2025, he sold a total of 50,000 Class A Common Stock shares at weighted average prices ranging from $337.9676 to $341.545.
• The sales were executed under a Rule 10b5-1 trading plan adopted on December 13, 2024.
• In connection with the Class A Unit conversions, 50,000 shares of Class B Common Stock were cancelled for no consideration on both June 3 and June 4, 2025, totaling 100,000 Class B shares cancelled.
• Following these transactions, Ernest C. Garcia II directly holds 0 Class A Common Stock shares, 37,242,317 Class B Common Stock shares, and 46,552,895 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 shares and 10,000,000 Class A Units.

Sentiment

Score: 6

Explanation: The sentiment is neutral to slightly positive. While insider selling can sometimes be viewed negatively, the fact that these sales were conducted under a pre-arranged Rule 10b5-1 plan significantly mitigates any negative interpretation, as they are not indicative of a lack of confidence in the company's future. The high sale prices also reflect a strong market valuation.

Positives

• The sales were conducted under a pre-arranged Rule 10b5-1 trading plan, which suggests the transactions were scheduled and not reactive to new, negative information about the company.
• The shares were sold at relatively high prices, ranging from approximately $332 to $341 per share, indicating a strong market valuation at the time of sale.

Negatives

• The sale of 99,000 Class A Common Stock shares by a director and 10% owner, while pre-planned, represents a significant reduction in direct Class A equity holdings by a key insider.

Future Outlook

This Form 4 filing does not contain any forward-looking statements or guidance regarding the company's future 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.
• Prices reported are weighted average prices, and the reporting person undertakes to provide full information regarding the number of shares sold at each separate price within the stated ranges upon request.

Industry Context

This SEC Form 4 filing is specific to insider transactions and does not provide information directly related to broader industry trends or competitive landscape within the automotive retail sector.

Related Party Transactions

• 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, which are considered related parties. The conversions of Class A Units into Class A Shares are governed by the Exchange Agreement dated April 27, 2017, between the Issuer and its related entities/members.

Stakeholder Impact

• Shareholders: The sale of a significant number of shares by a key insider, even if pre-planned, could lead to short-term market speculation. However, the 10b5-1 plan context helps to manage expectations and reduce concerns about insider confidence.
• Employees, Customers, Suppliers, Creditors: No direct impact is indicated by this filing, as it pertains solely to insider stock transactions.

Key Dates

Recommendation

Keywords

Carvana, CVNA, SEC Form 4, Insider Trading, Stock Sale, Ernest C. Garcia II, 10b5-1 Plan, Class A Common Stock, Class B Common Stock, Director, 10% Owner, Beneficial Ownership