Carvana Co. (NYSE: CVNA), an e-commerce company for buying and selling used cars, yesterday offered 4,200,000 shares of its Class A common stock at a price of $65 per share. The SEC does not yet have a filing confirming the results of the proposed transaction, but lately the market has been wary of such offerings from companies that are not solidly profitable. Carvana’s negative net “profit” is more than -3%. During Q1 the company reported ($0.55) earnings per share for the quarter, missing the Zacks’ consensus estimate of ($0.49) by ($0.06). In addition, Carvana wanted to grant the underwriters the right to purchase up to 630,000 additional shares of Class A common stock at the offering price. The offering was increased from the previously announced offering size of 3,500,000 shares of Class A common stock.
The offering is subject to customary closing conditions. Wells Fargo Securities, Citigroup and Deutsche Bank Securities acted as book-running managers for the proposed offering.
Carvana also announced the pricing of $250.0 million of additional 8.875% senior notes due 2023 (the “new notes”) in a concurrent private placement to qualified institutional buyers, in an offering exempt from registration under the Securities Act of 1933, as amended. The new notes will be issued as additional notes under the indenture governing the outstanding $350.0 million of senior notes that were issued on September 21, 2018.
In an SEC filing yesterday, Carvana said on May 24, 2019, Carvana Co. issued $250.0 million in aggregate principal amount of 8.875% Senior Notes due 2023 (the “New Notes”). The New Notes were issued as additional notes pursuant to the First Supplemental Indenture, dated as of May 24, 2019 (the “Supplemental Indenture”), among the Company, the guarantors party thereto (the “Guarantors”) and U.S. Bank National Association, as trustee (the “Trustee”). The Supplemental Indenture supplements the Indenture, dated as of September 21, 2018 (the “Indenture”), among the Company, the Guarantors and the Trustee.
Carvana intends to use the unknown net proceeds from the public offering of common and the private placement of new notes for general corporate purposes. Carvana “may use the net proceeds from these offerings to partially repay borrowings under its floor plan facility until it identifies other specific uses.” Buyer beware it’s selling equity to pay down debt.
About Carvana
Founded in 2012 and based in Phoenix, Carvana’s stated mission is to change the way people buy cars. By removing the traditional dealership infrastructure (and the cost associated with state licensing of dealerships) and replacing it with technology and a vague (to AutoInformed’s eyes) customer service promise, Carvana offers consumers an online car buying and financing platform. Carvana.com enables consumers to quickly shop more than 18,000 vehicles, finance, trade-in or sell their current vehicle to Carvana, sign contracts, and schedule as-soon-as-next-day delivery or pickup at one of Carvana’s automated Car Vending Machines.
About Ken Zino
Ken Zino, editor and publisher of AutoInformed, is a versatile auto industry participant with global experience spanning decades in print and broadcast journalism, as well as social media. He has automobile testing, marketing, public relations and communications experience. He is past president of The International Motor Press Assn, the Detroit Press Club, founding member and first President of the Automotive Press Assn. He is a member of APA, IMPA and the Midwest Automotive Press Assn.
He also brings an historical perspective while citing their contemporary relevance of the work of legendary auto writers such as Ken Purdy, Jim Dunne or Jerry Flint, or writers such as Red Smith, Mark Twain, Thomas Jefferson – all to bring perspective to a chaotic automotive universe.
Above all, decades after he first drove a car, Zino still revels in the sound of the exhaust as the throttle is blipped during a downshift and the driver’s rush that occurs when the entry, apex and exit points of a turn are smoothly and swiftly crossed. It’s the beginning of a perfect lap.
AutoInformed has an editorial philosophy that loves transportation machines of all kinds while promoting critical thinking about the future use of cars and trucks.
Zino builds AutoInformed from his background in automotive journalism starting at Hearst Publishing in New York City on Motor and MotorTech Magazines and car testing where he reviewed hundreds of vehicles in his decade-long stint as the Detroit Bureau Chief of Road & Track magazine. Zino has also worked in Europe, and Asia – now the largest automotive market in the world with China at its center.
Carvana Ups Size, Price of Common Offering. Results Unknown
The offering is subject to customary closing conditions. Wells Fargo Securities, Citigroup and Deutsche Bank Securities acted as book-running managers for the proposed offering.
Carvana also announced the pricing of $250.0 million of additional 8.875% senior notes due 2023 (the “new notes”) in a concurrent private placement to qualified institutional buyers, in an offering exempt from registration under the Securities Act of 1933, as amended. The new notes will be issued as additional notes under the indenture governing the outstanding $350.0 million of senior notes that were issued on September 21, 2018.
In an SEC filing yesterday, Carvana said on May 24, 2019, Carvana Co. issued $250.0 million in aggregate principal amount of 8.875% Senior Notes due 2023 (the “New Notes”). The New Notes were issued as additional notes pursuant to the First Supplemental Indenture, dated as of May 24, 2019 (the “Supplemental Indenture”), among the Company, the guarantors party thereto (the “Guarantors”) and U.S. Bank National Association, as trustee (the “Trustee”). The Supplemental Indenture supplements the Indenture, dated as of September 21, 2018 (the “Indenture”), among the Company, the Guarantors and the Trustee.
Carvana intends to use the unknown net proceeds from the public offering of common and the private placement of new notes for general corporate purposes. Carvana “may use the net proceeds from these offerings to partially repay borrowings under its floor plan facility until it identifies other specific uses.” Buyer beware it’s selling equity to pay down debt.
About Carvana
Founded in 2012 and based in Phoenix, Carvana’s stated mission is to change the way people buy cars. By removing the traditional dealership infrastructure (and the cost associated with state licensing of dealerships) and replacing it with technology and a vague (to AutoInformed’s eyes) customer service promise, Carvana offers consumers an online car buying and financing platform. Carvana.com enables consumers to quickly shop more than 18,000 vehicles, finance, trade-in or sell their current vehicle to Carvana, sign contracts, and schedule as-soon-as-next-day delivery or pickup at one of Carvana’s automated Car Vending Machines.
About Ken Zino
Ken Zino, editor and publisher of AutoInformed, is a versatile auto industry participant with global experience spanning decades in print and broadcast journalism, as well as social media. He has automobile testing, marketing, public relations and communications experience. He is past president of The International Motor Press Assn, the Detroit Press Club, founding member and first President of the Automotive Press Assn. He is a member of APA, IMPA and the Midwest Automotive Press Assn. He also brings an historical perspective while citing their contemporary relevance of the work of legendary auto writers such as Ken Purdy, Jim Dunne or Jerry Flint, or writers such as Red Smith, Mark Twain, Thomas Jefferson – all to bring perspective to a chaotic automotive universe. Above all, decades after he first drove a car, Zino still revels in the sound of the exhaust as the throttle is blipped during a downshift and the driver’s rush that occurs when the entry, apex and exit points of a turn are smoothly and swiftly crossed. It’s the beginning of a perfect lap. AutoInformed has an editorial philosophy that loves transportation machines of all kinds while promoting critical thinking about the future use of cars and trucks. Zino builds AutoInformed from his background in automotive journalism starting at Hearst Publishing in New York City on Motor and MotorTech Magazines and car testing where he reviewed hundreds of vehicles in his decade-long stint as the Detroit Bureau Chief of Road & Track magazine. Zino has also worked in Europe, and Asia – now the largest automotive market in the world with China at its center.