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DYTTIGAF t1_j9bjlk5 wrote

Carvana isn't in the used car business. They are in the note securitization business (which means they lend money on used cars to consumers who can qualify and bundle those thousands of notes and sell the bundled pile as a financial product).

Carvana needs volume. They need a pipeline of notes and that requires a pipeline of sales. This requires a pipeline of people who can qualify on a 11% car loan that is almost $40,000. This is now a very small percentage of consumers. Most are carrying credit card, mortgage, student loan, and miscellaneous personal debt that could choke a pig.

The Federal Reserve is getting ready to raise rates again in June. Carvana's models worked at 2% interest rates. They don't work at 11%.

Carvana is dead.

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Far_Introduction527 t1_j9bvqhe wrote

Try 22% they go high too. I bet you earnings will be better than expected

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DYTTIGAF t1_j9bwq1l wrote

Consumers need to qualify for these cars. Carvana does not hold the notes. The notes are repackaged an sold to investors.

Institutional investors will not buy securities from Carvana with car loans from people who live paycheck to paycheck (paying 21% ).

They did this with subprime mortgages back in 2007. They won't do it again.

Carvana is finished.

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jawn_blaze t1_j9bzg3y wrote

You have a lot of confidence but don’t really know what you’re talking about.

21% auto notes can absolutely be a good investment. Where in the capital structure? How much excess spread? What triggers?

All that said, Carvanas is a shady company and their losses will be worse than peers as most people who purchased from them way overpaid and the stated collateral value is too high. (So their stated LTV’s are artificially depressed)

Be careful dude, blind confidence can blow yourself up.

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Pepepopowa t1_j9f94by wrote

I’m tempted to break your comment down but I doubt we want to waste more time here.

“Institutional investors will not buy securities from Carvana with car loans from people who live paycheck to paycheck (paying 21% ).”

You reply that 21% car loans CAN be good investments. Really? In what way? For who?

Do you believe saying excess spread and trigger is a winning argument? Is your argument that you know more than him and his attitude upset you?

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DYTTIGAF t1_j9c1mqb wrote

That's why Carvana is done 90%. That's why billions in market capitalization has been lost. Where did those loses come from? Guys like you.

Carry on....

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jawn_blaze t1_j9c5ui4 wrote

I offered no one financial advice. You offered up emphatic truths to strangers in a subject you have a cursory knowledge of.

I’ll let others decide what’s better.

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Pepepopowa t1_j9f8dbr wrote

Bro the vocab isn’t impressive and it’s a little pretentious to agree with him but nit-pick his response for not being completely nuanced.

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DYTTIGAF t1_j9c6ief wrote

The market will decide and test. It will approve. It has already spoken but you will not discern the feedback.

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sound-of-impact t1_j9co4jx wrote

>The Federal Reserve is getting ready to raise rates again in June. Carvana's models worked at 2% interest rates. They don't work at 11%. > >Carvana is dead.

Simple. 15+ year auto loans. 🚀

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gaurav0792 t1_j9cqol1 wrote

Yea, a lot of people are regarded, but not that regarded.

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where_is_my_avocado t1_j9exeo7 wrote

Youre absolutely right but with >50% of shares short and even sellside getting bearish, who the fuck knows how bad it has to be to move the stock down

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Puzzleheaded_War6849 t1_j9h87lf wrote

They do a lot less of this now. Bulk of finance receivables are just pushed off onto Ally through forward-flow, not through CVNA sponsored securitizations.

They make a bit on the forward-flows, but it's dwarfed by the rest of the purported business model.

They really are just a (bad) car business. They need an absolutely astronomical amount of sales to support the bloated, debt laden company when they have unimpressive gross margins.

It's probably a $0 by 2025.

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Feeling_Inspector890 t1_j9md02s wrote

>lot less of this now. Bulk of finance receivables are just pushed off onto Ally through forward-flow, not thro

And with that foresight, you can't even double your money haha. Seems priced in.

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token-eater t1_j9b7oko wrote

Puts on Carvana?

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rocket_man19 OP t1_j9b95a5 wrote

That’s my play

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iWriteYourMusic t1_j9bbsjy wrote

28.2% options implied move lol good luck with that

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BedContent9320 t1_j9bi0wg wrote

Too many regards on options, shit is wild

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[deleted] t1_j9bluit wrote

[deleted]

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DeftShark t1_j9bud8m wrote

Tbh, it’ll probably shoot to around $23/$24.

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PinThatInTeParkinLot t1_j9byyr8 wrote

Too much IV

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Rballor t1_j9ci6di wrote

It will squeeze! No bankrupt company continues to advertise on tv/social media, and I see these delivery trucks once a month by me

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Mandiblelorian t1_j9g0onl wrote

You sonofabitch, i'm in! Just got bought 10 CVNA 02/24/2023 12.50 C!

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Far_Introduction527 t1_j9bvmhz wrote

Just curious, how would you profit off it NOT moving as much as that? since they seem to really be pricing in a big move. Even if it's shit, I doubt it'll move THAT much. Hell, it went up 4% today, so that is an extra 4% it has to un do as well lol.

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iWriteYourMusic t1_j9bvvy3 wrote

You wouldn’t. I think there are some good options calculators out there that can help you simulate IV crush. I don’t remember what the are. Personally if I feel like gambling earnings I do shares so I can get out during the big AH move. I want to go short CVNA and a BYND eod on Wednesday but I’m not sure I have the stones.

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Far_Introduction527 t1_j9bzilo wrote

Just wondering.if you can take advantage of a crush. (guessing only writing them then)

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MustWarn0thers t1_j9ce260 wrote

I think taking advantage of crush would be selling the options themselves, whether it be cash secured puts or share secured calls. Increased premiums.

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iWriteYourMusic t1_j9csv8g wrote

I would say you could buy the puts/calls a couple months before earnings and then sell the day before earnings report.

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Far_Introduction527 t1_j9d92w5 wrote

One thing I have always wondered is how soon do they price the options for an earnings?

Like how early do you need to do something like that? I love earnings plays, but when I KNOW it's gonna move SOME direction

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AnimeCiety t1_j9du28h wrote

Then you’re also dealing with time decay. You may not break even despite higher trending IV if time to expiry offsets.

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Werdna168 t1_j9dzvdv wrote

Straddle or strangle or the ever more secure iron condor.

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The_Punicorn t1_j9gzvm0 wrote

If your bet is it won't move that much, selling CSPs would let you take advantage of the premium. But your fucked if it does move.

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Far_Introduction527 t1_j9h0bz4 wrote

Yeah writing options is like shorting. Limited upside unlimited downside. I don't write em.

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The_Punicorn t1_j9h0uh1 wrote

Only selling Naked Calls have unlimited potential loss, and selling those is pure fucking greed. Your losses should be capped on any of the other writes.

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frsbrzgti t1_j9ddf0h wrote

Just passed by a Carvana building in Maryland and it had no cars in it.

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bailey25u t1_j9cha18 wrote

I applied there to be an IT manager, and they turned me down. So I agree with your position... Im in

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Mrtooth12 t1_j9birw4 wrote

I have a feeling that regardless of the outcome of earnings somehow the price will rise, the reason being that there is a lot of hype over carvana

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ScipioAtTheGate t1_j9brbo0 wrote

Imagine if they got rid of the Car part of their name and just switched to being "Vana" the van selling company

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fulldouche t1_j9cfbto wrote

You hate on Carvana all you want but I bought my Maserati from them! They delivered that beast to the front door of my cardboard box behind the Target and everything! Calls for life because of that.

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short-ldt t1_j9b9nv4 wrote

Mannheim Index increasing recently After Long period of decrease—>carvana will boost to Moon 🚀

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SigmaRemoteWorker t1_j9bpe4c wrote

Everytime market is closed escobar meme comes to rescue

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BreakfastOnTheRiver t1_j9bhl8i wrote

It will probably do what upstart did on earnings

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jigglywigglybiggly t1_j9cyu6z wrote

Lmao that’s what I’m thinking Upstart went up 28% analysts are estimating a 22% drop on CVNA I reckon it’ll go the opposite direction img

And if there is anything I’ve learnt is if majority of this sub is bearish on a certain ticker it rockets

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Fluid-Poet8474 t1_j9b9rjb wrote

And just $500 invested 😂

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Nmsokn t1_j9cprd1 wrote

This is me waiting to see if i get my juicy $5 gains this week

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GiantEarnings t1_j9bcacx wrote

I am really enjoying this 3 days weekend and also this weekend is suffocating me for waiting the market open.

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AlbatrossAndy t1_j9c7s4e wrote

Everyone calling puts on WISH so naturally they will pop by 50%. Mark my words.

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cristofolmc t1_j9cpn1d wrote

I need the casino to reopen!

3

Particular_Arm_8309 t1_j9bd6ox wrote

If Carvana doesnt file for bankrupty in 3 Days, i would think that the price would rise. The business model is well thought out and considering where the course comes from i am very confident 😁

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Data_Dealer t1_j9birbu wrote

Yes the business model of never making money, even when the used car market is at an all time high is well thought out...

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Expecto_nihilus t1_j9cvva7 wrote

Amazon has entered the chat.

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Data_Dealer t1_j9d04kc wrote

Amazon had to get up to scale, they've been very profitable for about 13 years now. Buying cars for more than anyone else and then selling them at a loss and being sued for illegal business practices in just about every state you operate in is not a good business model, and never will be.

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Particular_Arm_8309 t1_j9bp0z9 wrote

We will see in 3 Days 🙃

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Data_Dealer t1_j9bqbn4 wrote

When they announce more losses?

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Particular_Arm_8309 t1_j9bxjh0 wrote

It is not important how big the losses are, but how the market reacts to them. And there is the scope. Idont have any Options but the return will be juicy 😁

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technoexplorer t1_j9dhqou wrote

Everytime I go three days without filing bankruptcy I end up richer, too.

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WuTang360Bees t1_j9c1nvx wrote

IV is 200% for Carvana options. Just leave it alone.

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Boccob81 t1_j9ce2vt wrote

Puts maybe lol

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darkspd96 t1_j9e4e5x wrote

Weekends must be tough on you not having any friends

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HopeNo7406 t1_j9fojij wrote

We buy before the report, we will help the company. The shortists have become impudent

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VisualMod t1_j9b5wiu wrote

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1

flaming_pope t1_j9bpar1 wrote

!remindme 3 days,

IV gonna crush, good entry after drop.

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ekgpmd t1_j9q14es wrote

I’m back here. Caravana at $9.72 a share

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ekgpmd t1_j9bxtbo wrote

Same dude. It’s funny, I made a post about caravana and got downvoted and ignored by everyone on here. Funny.

1

Senorsaz t1_j9cenzb wrote

Red o or green o.

1

Trikki1 t1_j9d0dpv wrote

What about $root? They’ve been trending 2:1 with cvna and are pretty entwined.

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AideOdd1666 t1_j9dxaxz wrote

Why was it closed so long?

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MoonJumpMania t1_j9edow6 wrote

Y'all also have family day in the US?

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SupportUseful t1_j9yer0t wrote

LOL, Carvana is done .. anyone here gambling on another shortsqueeze? Lol

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DontTaxMeJoe t1_j9bsten wrote

Used car prices up and you’re taking puts on Carvana img

0

cgm808 t1_j9oylsf wrote

Good point. Though, used car volume is significantly down in Q4 2022 and drastically below the SAAR. Meaning, I am regarded and have no idea.

1