Carvana Announces $ 600 Million Registered Direct Offer
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Carvana Co. (NYSE: CVNA), a well-known e-commerce platform for buying and selling used cars, has announced a registered direct offering of 13.3 million Class A common shares. The shares are being bought at $ 45 for total gross proceeds of $ 600 million.
The offer is aimed at certain existing investors, including investments of $ 25 million each from Ernest Garcia III, founder and CEO of Carvana, and Ernest Garcia II. The offering is expected to close on April 1, 2020, and the proceeds from the public offering will go for general corporate purposes. This is an important development for investors concerned about Carvana’s finances, as COVID-19, and the negative economic impacts it will have across the United States, is putting financial pressure on many retailers. Carvana shares rose 18% on the pre-market.
“COVID-19 is impacting retail and consumer lending businesses nationwide, with local governments, businesses and consumers increasingly restricting business activity and capital markets are experiencing instability . This has an impact on our business and the automobile industry in general. Prior to the impact of COVID-19, we were on track to meet or exceed our annual forecast on all financial metrics. However, due to the highly uncertain impact of COVID-19 on our business and our industry, we are withdrawing our previous guidance provided on February 26, 2020. ”Carvana noted in an SEC filing.
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