Shares of Carvana (NYSE:CVNA) fell by over 90% last year, but so far, 2023 is shaping out to be a different story. CVNA stock is up by over 200% year-to-date, led by frenzied meme stock traders looking to snag a quick profit and short sellers being forced to cover.
Last month, The Wall Street Journal reported that the used-car retailer was “quietly terminating employees” based on internal emails. This comes on top of the 4,000 employees laid off last year.
Meanwhile, there is widespread speculation that Carvana is teetering on the brink of bankruptcy, although JPMorgan analyst Rajat Gupta believes that bankruptcy odds are low at the moment. Meanwhile, eToro Group analyst Callie Cox attributes Carvana’s gains to a hot start to the year for the entire market:
“It seems like there’s a new rush of optimism and speculation in markets because of the strong start to the year. This could be a case of a few investors feeling emboldened enough to take a chance on a beaten-down stock.”
As of mid-January, CVNA carried a short interest of 59.65%, which is well high enough to drive a significant short squeeze. The short interest is equivalent to 55.59 million shares shorted and rose 2.75% compared to the last reading.
5 Investors Betting Big on CVNA Stock
Tracking institutional ownership is important, as these large investors provide liquidity and support for stocks. During Q3, 263 13F filers disclosed ownership of CVNA, a decline of 32 filers from the prior quarter. In total, 13F filers own 125.65 million shares, up from 122.13 million shares. Meanwhile, the institutional put/call ratio sits at 0.51, down from 0.73. That’s equivalent to 10.26 million puts and 20.01 million calls, implying a bullish options stance. With that in mind, let’s take a look at the largest shareholders of Carvana:
- Ernest Garcia II, 10% owner: 78.47 million shares, accurate as of April 2022. Garcia II jointly owns 1.8 million shares with his son, CEO Ernest Garcia II, through two family trusts.
- Carvana Company: 28.22 million shares, accurate as of Feb. 1, 2022.
- Baillie Gifford: 14.16 million shares. Baillie purchased 24,723 shares during Q4.
- Morgan Stanley (NYSE:MS): 13.11 million shares. Morgan Stanley purchased 4.58 million shares during Q3.
- CVAN Holdings: 9.34 million shares. CVAN’s stake remained unchanged during Q3.
On the date of publication, Eddie Pan 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.