On April 5, This ‘X’ Pattern Changes Everything

It appeared before Ambrx Biopharma climbed 175%... before AMC soared over 1,000%... Now, it’s appearing in multiple stocks on a regular basis. Luke Lango believes he’s cracked the code. On April 5, he’s going to reveal everything – including a free X-pattern pick.

Wed, April 5 at 4:00PM ET

Why Is Carvana (CVNA) Stock in the Spotlight Today?

  • Carvana (NYSE:CVNA) stock is on the move this morning after releasing a new operating plan last week
  • The company has announced several major budget cuts, including layoffs for around 2,500 employees
  • Carvana recently lost its license to sell vehicles in Illinois after failing to meet certain regulatory requirements
Carvana (CVNA) logo on white object in foreground as well as a high-rise building in the background
Source: Jonathan Weiss / Shutterstock.com

Carvana (NYSE:CVNA) stock was up nearly 4% this morning on news of a new operating plan last week. Now, CVNA stock is only slightly in the green as investors struggle to show renewed faith in the car trader. On Monday, shares closed up by less than 1% after leadership offered insight into the company’s immediate actions going forward.

Recently, Carvana released a 53-slide presentation detailing its plans to reduce costs and improve cash inflows. As per management, the current state of financial markets, the third-party car industry and more have led the company to put profitability at the forefront of its operation.

Looking forward, the car trader plans to reduce selling, general and administrative expenses (SG&A) iteratively through the year. It set a goal of $4,000 in SG&A costs per retail unit by the end of the year. For context, Carvana’s SG&A was over $4,700 in 2021.

Carvana also plans to lay off about 12% of its workforce, or 2,500 employees, as part of its cost-cutting efforts. Company executives have agreed to forgo their salaries for the rest of the year in order to fund severance payments. The staffing cuts are projected to save the company $125 million in annual payroll. However, the company will also likely face a one-time expense for the layoffs — upwards of $20 million — in the second quarter of 2022.

CVNA Stock Shows Volatility as Investors Consider Jumping Back In

Initially, the announcement of these new plans read as a strong bullish indicator for investors who eagerly bought into the revamped company plan when the bell rang on Monday. That morning, CVNA stock climbed more than 15%. Into the day, however, the momentum clearly waned as shares closed roughly even. Now, the company’s strong start this morning could be a catalyst for the share price turnaround Carvana has been hoping for.

CVNA stock has lost more than 80% of its share price year-to-date (YTD) on a seemingly ongoing list of road bumps plaguing the company alongside the wider market downturn. Just last Friday, Carvana lost its license to sell vehicles in Illinois. This happened because the company was supplying Illinois customers with out-of-state temporary licenses and failing to transfer car titles within a set period of time.

Carvana is still operating on a net loss as well. As such, sheepishness towards CVNA doesn’t come as much as a surprise in today’s trading environment.

On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines

With degrees in economics and journalism, Shrey Dua leverages his ample experience in media and reporting to contribute well-informed articles covering everything from financial regulation and the electric vehicle industry to the housing market and monetary policy. Shrey’s articles have featured in the likes of Morning Brew, Real Clear Markets, the Downline Podcast, and more.

Article printed from InvestorPlace Media, https://investorplace.com/2022/05/why-is-carvana-cvna-stock-in-the-spotlight-today/.

©2023 InvestorPlace Media, LLC