The fortunes of the father and son behind Carvana Co. have rebounded, with shares of the Phoenix-based online used car dealer soaring more than 3,000% from record lows.
Ernie Garcia II and Ernie Garcia III’s combined net worth has increased by more than $11 billion since December 2022, when rising interest rates dented sales , and the company was forced to restructure its debt, Carvana’s stock price fell below $4 per share. On Thursday, the company reported strong first-quarter profits and revenue that beat analysts’ expectations, sending its stock price up 34% to its highest level in more than two years.
The one-day surge pushed the elder Garcia’s wealth to $10.9 billion from a 2022 low of $3.1 billion, while his son’s net worth climbed to $3.8 billion, according to the Bloomberg Billionaires Index.
“2022 and 2023 are going to be tough years for us,” Ernie Garcia III said in an interview with Bloomberg Television on Thursday. “When we went through that period, the team came together and we responded really well and I think this season has definitely been the best quarter in our history.”
Ernie Garcia III, 42, is the chief executive of Carvana, and his wealth comes largely from his stake in the company, which he and his 67-year-old father are also major shareholders in. ) co-founded in 2012.
Carvana is one of the companies benefiting from changes in consumer behavior during the Covid-19 pandemic. In August 2021, the stock hit an all-time closing high of $370.10 per share as customers rushed to snap up cars with stimulus money and low-interest loans.
Rising interest rates and mounting debt soon caused a sharp rise in the company’s stock and the Garcia family’s wealth, leading to cuts in advertising spending and vehicle inventory. The online retailer’s auto sales grew for the first time in six quarters in the first three months of 2024, with revenue reaching $3.1 billion.
Although the company’s performance has improved recently, the company still faces challenges. The company has more than $6 billion in debt and is still dealing with rising interest payments on restructured loans.
Both men took advantage of rising stock prices and sold some shares. The elder Garcia has sold $12 million worth of properties this year, while his son has sold less than $1 million.
