CVNA - Carvana pares huge gain after filing to sell 35M shares

2023-07-19 07:17:34 ET

Carvana ( NYSE: CVNA ) pared its huge gain in premarket trading on Wednesday after filing to sell 35M Class A shares. The auto retailer disclosed in a SEC filing that new issuance through one or more equity offerings of Class A stock could be fired off to raise at least $350M in aggregate gross proceeds.

Earlier, the auto retailer said it had the best quarter in its history in terms of adjusted EBITDA and total gross profit per unit. "Our strong execution has made the business fundamentally better, and combined with today’s agreement with noteholders that reduces our cash interest expense and total debt outstanding, gives us great confidence that we are on the right path to complete our three-step plan and return to growth," noted Carvana CEO Ernie Garcia.

In terms of debt, Carvana ( CVNA ) entered into a transaction support agreement with a group of noteholders representing over 90% of the aggregate principal amount outstanding of the retailer's existing senior unsecured notes. The deal will reduce cash interest expenses by $430M per year for the next two years. Notably, Carvana ( CVNA ) said Apollo, Pinco, and Ares all support the debt exchange deal.

Shares of Carvana ( CVNA ) were up 17.80% in premarket action to $46.87 after the highly-shorted stock was up more than 44% during the early session.

More on Carvana:

• Unveiling Carvana's Surge (Rating Downgrade)
• Carvana rally stalls after JPMorgan turns bearish on the auto retail stock
• Why did Carvana stock soar today? Good question

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