Morning Report: Carvana shares are off again today, as the firm speeds towards a one-third cut to its value post-IPO.
Shares of technology-powered auto vendor Carvana are off more than 5 percent today, landing a few nickels above the $10 mark in morning trading. The company went public for $15 per share.
It’s early days for Carvana, which debuted just last week. As such, it’s too soon to predict much about its future as a public company. What we can say is that public investors, which welcomed entries by recent tech IPOs like Yext and Mulesoft and Snap and Alteryx and Okta and Cloudera – all of which enjoyed first-day pops – failed to extend the same courtesy to Carvana.
Here’s the chart of Carvana’s performance since its IPO (via Yahoo Finance):
That is not a great result. Still, we should not read too much into one IPO falling from its list price. It was bound to happen eventually as more companies opt for public offerings.
That Carvana is the company losing air after its public leap is perhaps not the most shocking surprise. After all, the company posted steeply increasing losses on its books, including its largest-ever listed loss in the final quarter, which was reported in its S-1:
This loss was caused by a decline in the company’s gross margin per car, which fell from $1,347 to $435 between the third quarter of last year and the fourth, the same period that saw its loss reach a new low.
Regardless, Carvana managed to price mid-range and add a bucket of cash to its books. That’s a successful IPO regardless of what happens after the first public trade. Today, however, Carvana is showing that the market isn’t as enthused about all technology offerings as we might have thought.
From the Crunchbase Daily:
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