Nobody has sold more stock this year than Jeff Bezos, Mark Zuckerberg, or Sam Walton. However, an unexpected fourth player has made billions selling stock in his own son’s company. ð°ðļ
Ernest Garcia II, a 64-year-old billionaire and son of $CVNA CEO & Founder Ernest Garcia III, has sold $3.6 billion worth of stock. Garcia II is the owner of Carvana’s former parent, DriveTime.
During the pandemic, he added to his treasure trove of Carvana stock with a $25 million buy in a private offering, during which Carvana’s share price was valued as low as $30. The purchase made Garcia II, who does not work for the company, the company’s largest shareholder.Â
Since then, Carvana’s share price has exploded. The company is now worth over $60 billion, allowing Garcia II to take chips off the table. According to the Wall Street Journal, Garcia II’s sales represent just 16% of his holdings.Â
Carvana has already admitted that could be a red flag for some investors. A securities filing reveals that Carvana’s own filings warn against the “Garcia parties” not being “aligned” with investor interests. In other words, the Garcia family might trash investors for short-term gain. Uh-oh.
Academics and regulatory-types have echoed those concerns, claiming that revisions to the company’s “stock selling plan” (10b5-1 plan) has been changed frequently. The same parties are concerned that the family owns 85% of the company’s voting shares, in total.
However, there is nothing discernably illegal about the structure. Just that it’s… kinda sus. ðĪ