Could Carvana go bankrupt?

They plunged to an all-time low of $3.55 a share Wednesday, before closing at $3.83 a share, down 43% for the day. Used car retailer Carvana, facing a cash crunch, could be headed towards bankruptcy, according to both published reports and a bearish analyst’s call that slashes its share-price target to $1.

What happened to Carvana shares?

Shares of Carvana were trading below $5 a share for the first time since the company went public in 2017. Shares of Carvana plummeted by more than 40% during trading Wednesday after the embattled online used car retailer’s largest creditors signed a deal binding them to act together in negotiations with the company.

What happened to Carvana bonds in 2022?

At the end of 2022, as Carvana’s financial woes were mounting, the old bonds had slumped to just 40 cents on the dollar, suggesting that many investors feared that the company would default on the debt. In conjunction with the bond transaction, Carvana will issue about $350 million in new stock.