Feb. 2 at 1:09 AM
PickAlpha Weekend View-
Carvana’s “Amazon of cars” pitch is still being financed the old-fashioned way: debt + auto loans. Behind the glossy online brand, Carvana is running big weekly wholesale auctions, expanding reconditioning “megasites,” and leaning hard into loan origination/sales (with major buyers like Ally Financial), even as subprime stress and short-seller attacks (Gotham City Research) keep the equity one headline away from volatility.
Tickers:
$CVNA $ALLY $STLA
Our view is this is still a credit-cycle trade disguised as e-commerce: CVNA works as long as (1) funding windows stay open for its loan sales and (2) used-car demand stays firm. The clean trigger: if securitization/whole-loan bid softens or delinquencies force tighter approvals, the equity multiple compresses fast; if funding stays easy and GPU-like “growth at any price” sentiment persists, CVNA can keep scaling capacity into 2026 without the debt becoming a near-term constraint.
