(Bloomberg) — Carvana Co. shares fell after the used-car dealer gave investors a day’s notice that it was reporting quarterly results.
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The company said late Tuesday that it will report results before the market opens on Wednesday, more than a month earlier than previously planned. Shares fell as much as 10% in premarket trading.
Carvana has struggled with significant debt and a correction in used car prices, which has seen the company’s market value plummet by around 90% from its peak two years ago. While executives said in early June that operations were improving, interest expenses of more than $2,000 per car were a key reason the company reported a $286 million loss in the first quarter.
The Tempe, Arizona-based company canceled a $1[ads1] billion debt swap last month after a group of creditors refused to swap their notes. Debt holders including Apollo Global Management Inc. and Pacific Investment Management Co., which merged last year to prepare a restructuring, opposed the debt swap when the company first floated it in March.
Carvana has managed to slow its cash burn “materially” by cutting costs and taking advantage of robust used car prices, JPMorgan analyst Rajat Gupta said in a report last week. He downgraded the stock to the equivalent of a sell rating, citing the recovery since early May, and suggested the company should consider selling shares to pay down debt.
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