SCHEDULE: Carvana Insider Ernest Garcia II Updates Significant Stake, Reveals Potential Share Sales

Ernest C. Garcia II and ECG II SPE, LLC have updated their beneficial ownership in Carvana Co. to 23.9%, indicating a long-term investment strategy while reserving the option for future share sales and derivative transactions.

Summary

• Ernest C. Garcia II and ECG II SPE, LLC collectively report beneficial ownership of 43,342,792 Class A Common Shares of Carvana Co.
• This represents 23.9% of the Class A Common Stock, based on 138,083,496 Class A Shares outstanding as of July 28, 2025.
• Mr. Garcia directly holds 35,342,792 shares on an as-converted basis.
• ECG II SPE, LLC, wholly owned and controlled by Mr. Garcia, holds an additional 8,000,000 shares on an as-converted basis, representing 5.5% of the class.
• All reported share numbers are presented on an as-converted basis from Class A Units of Carvana Group, LLC.
• The Class A Unitholders have the option to exchange Class A Units (together with corresponding Class B Shares) for Class A Shares on a five-to-four basis, or for cash at the Issuer's election.

Sentiment

Score: 5

Explanation: The filing is a standard disclosure of beneficial ownership and investment intent. While it mentions potential future sales, which could be seen negatively, the primary purpose is informational, making it largely neutral in sentiment.

Positives

• Significant insider ownership by Ernest C. Garcia II, indicating continued alignment with the company's long-term interests.
• The stated purpose of holding shares for investment purposes suggests a belief in the company's future value.

Negatives

• The disclosure of potential future sales of Class A Shares via Rule 10b5-1 trading plans could introduce selling pressure on the stock.
• The possibility of entering into derivative transactions like covered calls or collars may indicate a strategy to generate income or hedge positions, which could be interpreted in various ways by the market.

Risks

• Potential future sales of Class A Shares by the reporting persons could increase market supply and exert downward pressure on the stock price.
• Entry into derivative transactions (e.g., covered calls, collars) could impact share price volatility or signal a cap on upside expectations from the reporting persons' perspective.

Future Outlook

The reporting persons intend to hold their Class A Shares for investment purposes but may, from time to time, sell shares through Rule 10b5-1 trading plans for asset diversification and liquidity. They also reserve the right to engage in derivative transactions such as covered calls or collars. Future actions may include acquiring or disposing of securities, entering into hedging or lending arrangements, or formulating other plans as circumstances warrant.

Management Comments

• Ernest C. Garcia II and ECG II SPE, LLC acquired and currently hold Class A Shares for investment purposes.
• The reporting persons may, from time to time, sell Class A Shares pursuant to Rule 10b5-1 trading plans as part of their long-term strategy for asset diversification and liquidity.
• They may also enter into covered call transactions, collar transactions, or other similar derivative transactions with respect to the Class A Shares.

Industry Context

This filing is a routine disclosure of significant beneficial ownership by a key insider in Carvana Co. and does not provide broader industry trends or competitive analysis. It primarily reflects the individual investment strategy of a major shareholder.

Related Party Transactions

• Ernest C. Garcia II wholly owns and controls ECG II SPE, LLC, which holds 8,000,000 Class A Shares on an as-converted basis.
• The Issuer (Carvana Co.) and Class A Unitholders (including the reporting persons) are parties to the Carvana Group LLC Agreement and the Exchange Agreement, which govern the exchange of Class A Units for Class A Shares or cash.

Stakeholder Impact

• Shareholders: Potential impact from future share sales by a significant insider, which could affect stock price.

Next Steps

• Reporting persons may sell Class A Shares via Rule 10b5-1 trading plans.
• Reporting persons may enter into covered call, collar, or similar derivative transactions.
• Reporting persons may acquire or dispose of additional securities of the Issuer.
• Reporting persons may enter into hedging or lending arrangements with respect to the securities.
• Reporting persons may formulate other purposes, plans, or proposals regarding their investment.

Key Dates

Keywords

Carvana Co., CVNA, Schedule 13D, Beneficial Ownership, Insider Ownership, Ernest C. Garcia II, ECG II SPE, Class A Common Stock, Investment Strategy, Rule 10b5-1, Derivative Transactions