Almost two years ago, Carvana (NYSE: CVNA) was tethering on the brink of bankruptcy as it experienced a sharp 27% decline in used car sales throughout 2022, which caused its stock to plummet below $5 at one point.
Since then, CVNA stock has posted an impressive recovery, surging over 3,500% and gaining almost 200% in 2024 alone; this resurgence and return to profitability make for one of the most remarkable stories on the stock market recently, surging from $48.87 on January 1 to $146.52 as of the latest close, which saw its shares add 9.98% after announcing Q2 earnings on July 31.
It seems unlikely that anyone could have predicted this recovery, except this assumption is wrong; CVNA insiders could.
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CVNA stock received maximum confidence from insiders during the troubles
In 2022, Carvana saw its first decline in car sales in nine years as the used car market took a downturn. The company’s losses soared to $806 million, or $7.61 per Class A share, in the fourth quarter, compared to $89 million in 2021.
Carvana reported a $1.6 billion loss for the entire year, a significant increase from the $135 million loss in 2021.
However, the insiders saw the opportunity and purchased $663 million worth of CVNA stock at dates that directly coincided with its diminished value, according to data from insider stock trade tracker Quiver Quantitative.
CVNA’s CEO and CPO were the most prominent insider buyers
Going back to insider trading data from 2022, it is evident that CVNA stock has received the most backing from its higher executives.
Ernest Garcia II, CEO of Carvana, bought 1,985,258 shares on one occasion on June 13, 2022, at an average price of $21.1, for a total purchase of $42 million.
The second largest buyer was the company’s CPO, Daniel Gill, who, on two different occasions, June 16 and November 21, 2022, bought 94,000 and 133,000 shares at average prices of $21.7 and $7.6, for a total transfer amount of $3.1 million.
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