Carvana Shares Plunge 4.25% with $830M Volume Drop as Insiders and Institutions Sell Off

Carvana (CVNA) closed August 19 at $346.34, marking a 4.25% decline with $0.83 billion in trading volume, reflecting a 29.05% drop from the previous day’s turnover. The stock’s price fell below its 50-day moving average and approached its 200-day low of $239.95, erasing $13 billion from its market capitalization since the 52-week high of $413.33.

Analysts attributed the selloff to bearish options activity and insider sales. A $350 put option trade with $970 per contract premium and 30 contracts exchanged signaled institutional bearishness ahead of the August 22 expiration. CEO Ernest C. Garcia III and major shareholder Ernest C. Garcia II sold $3.48 million and $33.19 million worth of shares, respectively, compounding investor concerns. Technical indicators showed a MACD crossover below the signal line and an RSI of 57.8, suggesting unwinding overbought conditions.

CVNA’s performance contrasted sharply with broader market dynamics. The stock’s 93.4 P/E ratio and 3.57 beta highlighted structural vulnerabilities compared to peers, while its 2.51 debt-to-equity ratio amplified downside risks. The YieldMax CVNA ETF (CVNY) dropped 2.58%, and the 2X leveraged CVNX fell 7.71%, reflecting heightened volatility.

A backtest of CVNA’s performance after a 4% intraday decline revealed potential for recovery. The 3-Day win rate stood at 53.02%, the 10-Day at 53.36%, and the 30-Day at 61.74%. The maximum return during the test period was 19.90% over 30 days, underscoring recovery potential following significant pullbacks.