Bankruptcy is becoming more likely for beaten-down car seller Carvana, according to Wedbush Securities.
Bankruptcy is becoming more likely for beaten-down car seller Carvana , according to Wedbush Securities. Analyst Seth Basham downgraded the online used car retailer's stock to underperform from neutral and slashed his price target to $1 from $9 per share. That's 85.1% down from where it closed Tuesday and 99.7% off its pandemic closing high of $360.98.
Basham said a restructuring would allow to company to bring down its annual interest expense burden of more than $600 million. It would also help reduce assets and costs as the company works toward profitability. A bankruptcy was less likely before the news because one family owns 40% of equity, he said, which would make it difficult for ununified debt holders to have a bigger say.
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