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Carvana Co. shares did a U-turn Friday to continue their winning streak and finish their best week ever.
Carvana
CVNA,
shares increased 1.4% to $14.45, for their seventh consecutive daily gain, after hitting declines of as much as 9.1% earlier in Friday’s session. Their “meme”-like win streak led to an 86% gain on the week, the best weekly gain on record for the stock, which went public in April 2017.
The stock has now rocketed 124.7% in the seven-session winning streak, its longest since an eight-day stretch that ended July 12, 2021, according to Dow Jones Market Data. Shares have tripled so far this year, gaining 204.9% through the first few weeks of 2023, but are still more than 96% shy of their all-time closing high of $370.10, reached on August 10, 2021.
Carvana stock began to show “meme”-like tendencies earlier this month, amid a relatively high short-interest position in the stock, and the company also adopted a shareholder rights plan (“poison pill”) to block investors from taking advantage of the stock’s weakness to buy up a large stake.
From Barron’s: Carvana Stock Surged This Week. Analysts See It Heading Lower.
Short-interest, or bearish bets on the stock, represented 59.7% of the public float, according to the latest exchange data, or shares available for public trading. That compares with that of the original “meme” stocks, with short-interest as a percentage of public float at 23.5% for GameStop Corp.
GME,
and AMC Entertainment Holdings Inc.
AMC,
at 22.6%.
Carvana sales more than doubled in 2021, when demand for used cars spiked amid less usage of public transit during the COVID-19 pandemic, though the company continued to lose money both on a GAAP and free-cash-flow basis. Losses steepened in 2022, as revenue growth slowed down. When Carvana reports fourth-quarter results on Feb. 23, analysts an average expect that annual sales will end up about 8.4% higher at $13.88 billion, while annual net losses are expected to grow more than sixfold, from $287 million to $1.84 billion.
Carvana shares have now declined 90.2% in the past 12 months, as the S&P 500 index
SPX,
has declined 6.7%.
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