A Carvana used car ‘vending machine’ on May 11, 2022 in Miami, Florida.
Joe Raedle | Getty Images
Carvana shares were briefly halted on Monday due to volatility, falling more than 20% to below $7 a share — the lowest on record.
Carvana stock posted its worst day ever on Friday after the company missed Wall Street’s sales expectations for the third quarter as the outlook for used cars plummeted on record demand, prices and earnings during the coronavirus pandemic.
The seedy used car dealer’s volume rose on Monday. In the first 22 minutes of trading alone, more than 9.2 million Carvana shares changed hands. That’s more than 65% of the stock’s 30-day moving average volume of $14.14 million.
Carvana shares are down 97% this year after hitting an all-time high of $376.83 per share on Aug. 10, 2021.
Morgan Stanley withdrew its rating and target price on the stock on Friday. Analyst Adam Jonas cited a deteriorating used car market and a volatile financing environment for the switch.
Used vehicle prices and profits have risen significantly as consumers who cannot find a new vehicle or cannot afford to buy a new vehicle have opted for a used car or truck. New vehicle inventories have been significantly reduced during the coronavirus pandemic primarily due to supply chain issues, including an ongoing global semiconductor chip shortage.
However, rising interest rates, inflation and recession fears have made consumers less willing to pay the record prices, leading to declines at Carvana and other used car companies like CarMax.
–CNBC’s Fred Imbert contributed to this report.
This is an evolving story. Please check back for further updates.