{"id":339615,"date":"2017-04-29T05:28:23","date_gmt":"2017-04-28T21:28:23","guid":{"rendered":"http:\/\/techcrunch.com\/?p=1483193"},"modified":"2017-04-29T05:28:23","modified_gmt":"2017-04-28T21:28:23","slug":"auto-site-carvana-tumbles-26-in-stock-market-debut","status":"publish","type":"post","link":"https:\/\/people.utm.my\/asmawisham\/auto-site-carvana-tumbles-26-in-stock-market-debut\/","title":{"rendered":"Auto site Carvana tumbles 26% in stock market debut"},"content":{"rendered":"

<\/p>\n

Carvana, the site for buying and selling cars, had a rough first day in the public markets. After pricing its IPO at $15 per share, it ended the day down 26% at $11.10.<\/p>\n

Bankers typically recommend a price that would cause the shares to go up about 20% or so on the first day, known as a \u201cpop.\u201d But Carvana maximized every last dollar in its $225 million offering, at the cost of new investors.<\/p>\n

They\u2019re still hoping\u00a0the IPO will raise their profile and bring about new customers.\u00a0Carvana wants to make\u00a0shopping for a car as easy as buying a book on Amazon.<\/p>\n

\u201cWe built a website that\u2019s very easy to navigate,\u201d CEO and founder Ernie Garcia, told TechCrunch. \u201cThe customer response has been very strong.\u201d<\/p>\n

With vending machines in Texas and Tennessee, customers can buy a car without having to interface with pesky salesman. They can also order directly on the website\u00a0<\/a>and get free shipping if they live in one of the 21 target markets, primarily in the eastern half of the country. Others throughout the continental U.S. can still order cars through Carvana, but may have to pay for shipping.<\/p>\n

These aren\u2019t new cars. They are older vehicles that Carvana obtains directly from consumers, rental car fleets or expired leases.<\/p>\n

Carvana\u2019s revenue is growing fast. Last year they brought in $365.1 million in revenue, compared to $130.4 million the year before and $41.7 million the year before that.<\/p>\n

But losses are growing, too. The company lost $93.1 million last year, compared to $36.8 million the year before.<\/p>\n

When asked about a growing portion of young people shunning car ownership in the age of Uber,\u00a0Garcia downplayed concerns. \u201cThere are certain markets where that\u2019s a trend,\u201d but he\u2019s selling to a \u201cbroad mix of customers.\u201d<\/p>\n

Launched just four years ago, Phoenix, Arizona-based Carvana\u00a0doesn\u2019t fit the profile of a\u00a0typical internet IPO. \u00a0Like its Silicon Valley brethren, Carvana received funding prior to the IPO, but instead chose not to share\u00a0investor names. The S-1 filing<\/a> only shows CEO Ernest Garcia and CVAN Holdings as 5% stockholders, the threshold for required disclosure.<\/p>\n

It\u2019s hard to say what valuation the company raised at, but it\u2019s $1.5 billion public market cap\u00a0puts it in \u201cunicorn\u201d territory.<\/p>\n

Carvana wasn\u2019t the only tech company to debut Friday. Taking advantage of an open IPO \u201cwindow,\u201d Cloudera also went public\u00a0and priced its shares at $15. Unlike Carvana, Cloudera\u2019s shares closed up over 20%.<\/p>\n

Both companies listed on the New York Stock Exchange.<\/p>\n","protected":false},"excerpt":{"rendered":"

\"\" Carvana, the site for buying and selling cars, had a rough first day in the public markets. After pricing its IPO at $15 per share, it ended the day down 26% at $11.10. Bankers typically recommend a price that would cause the shares to go up about 20% or so on the first day, known as a “pop.” But Carvana maximized every last dollar in its $225 million offering, at the cost of… Read More<\/a><\/p>\n

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