Carvana stock rebound boosts fortunes of CEO and his dad by billions
Carvana's Ernie Garcia III and his father have seen a combined $11 billion added to their net worths in the online used car dealer's turnaround
The resurrection of Carvana's stock price from its 2022 lows has amounted to a monumental rise in the fortunes of its chief executive and his father.
CEO Ernie Garcia III, who co-founded the company, and his father, Ernie Garcia II, who bankrolled it, have seen a combined $11 billion increase in their net worths since December 2022, thanks to a 3,000% increase in share price from that time, Bloomberg reported Thursday.
Ernie Garcia III, founder and chief executive officer of Carvana Co., second left, and his father Ernest Garcia II, chairman of Carvana Co., center, stand during the company's initial public offering (IPO) on the floor of the New York Stock Exchange (Michael Nagle/Bloomberg via Getty Images / Getty Images)
When the Carvana stock hit its low point, there were murmurs that the online used car dealership was headed for bankruptcy court, falling after a titanic rise during the pandemic. But the company appears to have righted the ship – at least for now – after restructuring its operations and debt since that time.
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Carvana stock surged this week after the company forecast a surprise rise in current-quarter retail sales and core profit, sending shares up 34% on Thursday.
A Carvana used car "vending machine" on May 11, 2022, in Miami, Florida. ((Photo by Joe Raedle/Getty Images) / Getty Images)
With that boost, Bloomberg reported, the older Garcia's net worth hit $10.9 billion, up from $3.1 billion just a few years ago. His son's fortune reached $3.8 billion this week.
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The company reported a first-quarter profit of $49 million, compared with analysts' estimates of $31.2 million, according to LSEG data.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| CVNA | CARVANA CO. | 259.36 | +10.98 | +4.42% |
Carvana Co.
Carvana's latest results come as high interest rates prompt consumers to look for deals on second-hand cars instead of buying new ones.
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The company's shares are up about 65% this year after recording an 11-fold rise last year.
Reuters contributed to this report.