Carvana's (CVNA) stock market comeback was one of the most dramatic. Carvana has reversed eight years of increasing margins by the end of 2022.
Despite selling more than twice as many automobiles in 2022 as it did in 2019, the company's yearly loss skyrocketed to about $2.9 billion.
The business was on the verge of bankruptcy, but it has since recovered to record revenue and gross profit per vehicle earlier this year.
Carvana's shares fell 98% in 2022 from just about $4 per share three years prior. The stock will join the S&P 500 (^GSPC) later this month, culminating an 11,000% rise that devastated short sellers.
The company will join the ranks of Robinhood (HOOD) and Coinbase (COIN), two other businesses whose shares were severely damaged during the 2022 bear market before experiencing their own dramatic turnarounds, when it is added to the S&P 500.
The S&P 500 saw its worst performance since the financial crisis and one of its worst years on record outside of a recession in 2022 due to rising interest rates, skyrocketing inflation, and a bear market for cryptocurrencies. Carvana, Robinhood, and Coinbase were all at the heart of that maelstrom.
Garcia stated, "It's very difficult for a group to go through a period like the last two years and not disintegrate under the pressure."
"We didn't fall apart." Even Adam Jonas of Morgan Stanley, who had previously cautioned that the stock would fall to $0.10, became overweight on it in May and referred to the platform as the "potential 'Amazon of auto retail.'"
The analyst stated in October that he believes Carvana will increase from its current 1.5% market share to 12% by 2040. Ihor Dusaniwsky, managing director of S3 Partners, told Yahoo Finance, "CVNA short sellers have had a scarier ride than the Conry Island Cyclone." "Mark-to-market losses for shorts have decreased by $8.44 billion since their peak in 2022."
After joining the index in September, trading platform Robinhood Markets (HOOD), the face of the 2021 meme stock craze, has also made a comeback and is expected to rank fourth in the S&P 500 this year.
After hitting a low of about $7 in 2022 due to aggressive cost-cutting reductions and acquisition rumors, its stock has now up roughly 1,450%.
Vlad Tenev and Baiju Bhatt, the company's founders, decided to forgo their personal $500 million bonus contracts in order to minimize costs and accelerate profitability.
It was crucial to tighten the belt. In 2022, Robinhood's operational expenses decreased by 31% while its revenue decreased by 25%.
For a company to be included in the S&P 500, its market capitalization must exceed $22.7 billion and it must have been profitable for the preceding four quarters. In 2024, Robinhood broke a three-year losing skid and reported its first full year of profit, overcoming that obstacle.
Citizens analyst Devin Ryan told Yahoo Finance on Wednesday, "They've grown up along the way in terms of just understanding what institutional investors demand for investments and driving both the growth in the investments, but also at a high level of profitability."
Over the past year, the business has been aggressively introducing new features related to its "super app," including as tokenized stocks and its fastest-growing section, prediction markets.
CEO Vlad Tenev has even offered the platform to manage the President's proposed "Trump accounts" of $1,000 for births in an effort to manage almost every facet of clients' finances.
In addition, Coinbase (COIN), the biggest cryptocurrency exchange in the world and a major rival of Robinhood, is racing to launch new products for its "everything exchange," such as prediction markets and tokenized assets.
Coinbase, a cryptocurrency platform that had previously faced severe scrutiny and lawsuit from the SEC, underwent a spectacular turnaround in May when its shares were included to the benchmark S&P 500 index.
Earlier this year, Coinbase CEO Brian Armstrong told Yahoo Finance, "Coinbase joining the S&P 500 means crypto's here to stay."
This year, the company's third-quarter revenue increased by 54% to $1.87 billion. Additionally, net income increased from $0.28 a year ago to $1.50 per share. In the meantime, the platform saw a 37% increase in consumer trading activity to $59 billion from the previous quarter.
Coinbase shares reached all-time highs because to historic stablecoin legislation passed over the summer, but October's cryptocurrency sell-off has caused the company's stock to lose the majority of its year-to-date gains.
Ryan from Citizen is still optimistic about the business, which targets both institutions and individual traders and has earned the moniker "AWS of blockchain."
Ryan explained, "That entails utilizing all the expertise and skills they've developed over the course of more than ten years and then providing those externally to their customers in order to be able to bring them onto the blockchain."
Wall Street believes the Market Structure CLARITY Act will be the next major driver of the cryptocurrency market, notwithstanding the current downturn.
"What these companies have been able to do successfully is to stay focused on where they believe the puck is going and building for that," Ryan stated.
