The posterchild for pandemania excess has returned ~55x since it was left-for-dead

Selling second-hand luxury cars is an incredible business, it turns out. Plus other notes from earnings, including AI doing services

• Only a moron would buy stock in a loss-making, consumer app that lived and breathed cheap credit . . . a moron who just returned 55x on their investment in under two years

• Yet another shitco . . . lapping the field by every relevant operating metric

• Dealing in second-hand luxury, ftw

• Other earnings notes, of squishy clogs, and bringing violence and death to our enemies with AI.

---

👉👉👉Reminder to sign up for the Weekly Recap only, if daily emails is too much. Find me on twitter, for more fun. 

Posterchild for pandemania excess is actually a 55-bagger

One of the poster-children for ZIRPian excess was the used car app, Carvana CVNA 0.00%↑.

The stock nearly quadrupled to a pandemania peak of $360/share . . . before cratering to $4/share in early 2023.

If you’ve ever used the app, it’s actually pretty neat, and buying a car is terrible, so making it better is good.

Anyways, the collapse was accompanied by plenty of told-you-so’s: Carvana was a fraud. It relied on cheap debt to finance its operations. It was buoyed by absurdly high car prices, and consumers who could afford them. Only a moron would invest in a cash-burning, unprofitable tech company, run by some career criminals with shady accounting.¹

As it turns out, a moron who bought Carvana at its nadir would now be sitting on a 55x return:

Carvana has now regained ~60% of its pandemania peak, after bottoming at ~$4/share at the end of 2023.

That is one helluva comeback.

Will it stick? Who knows. But tip your cap, if only for a moment.

But there’s more to the story, for Random Walk’s purposes, I promise.

Carvana great at everything now

Last week, Carvana’ shares jumped another ~20% as it reported better-than-expected sales-growth and cost-cutting.

• More cars sold:

  

• More profits per car:

  

Carvana Q3 Investor Letter

Selling more with better margins is a thing that’s good, I’m told.

What’s even more impressive is that Carvana is out-performing in an otherwise tough environment for used cars.