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Carvana stock collapses amid bankruptcy fears

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carvana (CVNAShares rose on Wednesday after the online auto retailer’s largest creditors signed an agreement to cooperate in potential restructuring negotiations as the company faces the heightened risk of bankruptcy.

The company’s stock fell about 43% on Wednesday.

Bloomberg News, citing people familiar with the matter, reported tuesday A group of Carvana’s 10 largest lenders took about $4 billion of the company’s unsecured debt into a three-month agreement to work together in the event of a restructuring. Creditors included in the report include Apollo Global Management and Pimco. (Disclosure: Apollo Global Management owns Yahoo.)

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Pimco and Apollo declined to comment. Carvana did not immediately respond to Yahoo Finance’s request for more information.

Wednesday’s crash in Carvana’s share price also comes as Wedbush analyst Seth Basham downgraded the stock to Underperform and lowered its price target to $1 from $9 after news of the agreement, citing a high risk of bankruptcy for the company.

“This movement [from creditors] It will help avoid the infighting between lenders that has occurred in other recent restructurings,” Basham wrote in a note. “We believe these developments indicate a higher probability of debt restructuring that could leave equity worthless in a bankruptcy scenario.”

Basham is also called Karvana Acquisition of Adesa’s physical auction business Back in May, an “ill-timed” deal, “has an albatross around its neck, not only adding $336 million in additional annual interest expense accrued but also burdening the company with additional renewal capacity it doesn’t need.”

A used Carvana “vending machine” on May 11, 2022 in Miami, Florida. (Photo by Joe Riedel/Getty Images)

Shares of the beleaguered online car dealer fell below $4 on Wednesday, marking the first time Carvana’s share price has fallen below $5 since the company went public in 2017. Carvana stock is down more than 98% since the start of the year.

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Wednesday’s downgrade from Wedbush comes as a slew of Wall Street analysts have downgraded their ratings on the stock in recent months.

Last month, Bank of America downgraded Carvana to neutral due to liquidity concerns and liquidity burn. “We now believe that without a cash injection, Carvana will likely run out of cash by the end of 2023,” Bank of America’s Nat Schindler and Vincent Hubner said in a November 30 note.

earlier in november, Morgan Stanley analysts said The shares could be worth $1 per share amid what they saw as a deterioration in the company’s fundamentals.

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Alexandra Semenova is a correspondent at Yahoo Finance. Follow her on Twitter @tweet

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MicroStrategy is at its lowest level since 2020 after the sales were revealed

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(Bloomberg) — Shares of MicroStrategy touched their lowest level since August 2020 after the enterprise software company, which in recent years has been known as the largest buyer of bitcoin, revealed its first sale of the token.

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The stock fell 1.1 percent to $136.63 on Thursday, down 75 percent this year. Bitcoin rose less than 1% to around $16,590 and is believed to have fallen 64% since the start of the year.

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In a filing on Wednesday, MicroStrategy said it acquired approximately 2,395 Bitcoin between the beginning of November and December 21 through its subsidiary MacroStrategy, and paid out approximately $42.8 million in cash. It then sold 704 of the tokens on Dec. 22 for a total of about $11.8 million, citing tax purposes, before buying another 810 of them two days later.

Matt Malley, chief market strategist for Miller Tabak + Co. Step down as CEO. This news means they don’t seem to want to do that anytime soon.”

Overall, MicroStrategy held about 132,500 bitcoins worth over $4 billion USD as of December 27th. The company paid an average purchase price of $30,397 per bitcoin.

“Given MicroStrategy’s $2.4 billion in leverage, we believe the company may have a lot of leverage over Bitcoin, and may face some liquidity risk,” Jefferies analyst Brent Thiel wrote in a note on Wednesday. Thill has an “underperform” rating on the stock and a price target of $110.

Over the years of the pandemic, MicroStrategy has become well known for its Bitcoin takeovers, largely led by Saylor. Earlier this year, Saylor stepped down from that role and now serves as CEO at the company and continues to lead its bitcoin strategy.

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MicroStrategy was trading around $120 before Saylor first announced the company’s Bitcoin purchases in 2020. The stock reached an all-time high of $1,315 in February 2021.

(Updates to include the stock’s closing price in the second paragraph.)

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Bankman-Fried May File Petition in New York Federal Court Next Week Before Judge Louis Kaplan By Cointelegraph

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Former FTX CEO Sam Bankman-Fried is set to appear in court on the afternoon of January 3 to enter a lawsuit over two counts of wire fraud and six counts of conspiracy against him related to the collapse of cryptocurrency exchange FTX, according to Reuters. mentioned on December 28, citing court records. Bankman-Fried will appear before District Judge Lewis Kaplan in Manhattan.

Judge Kaplan was appointed to hear the case on December 27 after the original judge in the case, Ronnie Abrams, Resigned herself because of connections between FTX and the law firm Davis Polk & Wardwell, where her husband is a partner. The company provided advisory services to FTX in 2021.