Recent comments in /f/wallstreetbets

DYTTIGAF t1_j9bjlk5 wrote

Carvana isn't in the used car business. They are in the note securitization business (which means they lend money on used cars to consumers who can qualify and bundle those thousands of notes and sell the bundled pile as a financial product).

Carvana needs volume. They need a pipeline of notes and that requires a pipeline of sales. This requires a pipeline of people who can qualify on a 11% car loan that is almost $40,000. This is now a very small percentage of consumers. Most are carrying credit card, mortgage, student loan, and miscellaneous personal debt that could choke a pig.

The Federal Reserve is getting ready to raise rates again in June. Carvana's models worked at 2% interest rates. They don't work at 11%.

Carvana is dead.

47