The covered call sale caps Garcia's upside on 10M shares at $90, suggesting he expects limited near-term upside above that level or is monetizing his position. Monitor for any further hedging or selling activity by Garcia, as well as the stock's performance relative to the $90 strike ahead of the November 2027 expiration.
How the stock moved after the report
⚠ Clustered NEUTRAL VIEWSTOCK BELOW ENTRY AT T+1- T+0 · Nov 3 $77.56entry
- T+1 · yesterday −7.07%α −2.66% · $72.08
- T+2 · todayOpen
- T+5 · in 4d Pending
- T+20 · in 26d Pending
- T+60 · in 3mo Pending
Price Chart
REPLAYWatch the reaction play outHow similar events traded
Executive Summary
Ernest C. Garcia II, Carvana's founder and controlling stockholder, filed Amendment No. 40 to his Schedule 13D, reporting that his wholly owned entity ECG II SPE II, LLC sold covered call options on 10,000,000 Carvana shares (strike $90, expiring November 2027) to Citibank. Garcia's beneficial ownership remains unchanged at 212,211,585 shares (22.7% on an as-converted basis). The covered call transaction generates option premium income for Garcia but caps upside on those shares above $90 and introduces counterparty risk via a pledge of 12,500,000 Class A Units and 10,000,000 Class B shares as collateral.
Key Financial Metrics
Key Facts
- Ernest C. Garcia II beneficially owns 212,211,585 Carvana shares (22.7% on an as-converted basis), unchanged from prior filing.
- On October 30, 2026, ECG II SPE II, LLC sold to Citibank covered call options on 10,000,000 Carvana Class A shares at a strike price of $90.00 per share, exercisable only on November 19, 2027.
- The call option is European-style, physically settled only, and is collateralized by a pledge of 12,500,000 Class A Units and 10,000,000 Class B shares.
- Garcia retains voting and dispositive power over the pledged securities during the option term, subject to Citibank's rights upon default.
- Garcia also executed a guarantee of certain payment and performance obligations of ECG II SPE II under the call option master agreement.
- The filing follows Carvana's record Q3 2026 earnings (revenue $8.04B, up 42% YoY; net income $483M) reported on October 28, 2026.
Financial Impact
Covered call sale on 10,000,000 shares at $90 strike, representing 1.4% of outstanding Class A shares (722.7M). Premium amount not disclosed. Garcia's stake value at snapshot price (~$104 implied by $75.3B market cap on 722.7M shares) is approximately $22.1B.
Risk Factors
- Garcia's covered call sale introduces counterparty risk via the pledge of 12.5M Class A Units and 10M Class B shares as collateral; a default could trigger loss of those securities.
- The $90 strike price is below the current market price (implied ~$104), meaning Garcia forgoes upside on 10M shares above $90 in exchange for premium income.
- Garcia's continued control (22.7% stake) and hedging activities may signal his view on the stock's valuation and future prospects.
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 3 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| SC 13D/A Filing (Primary) | 0001193125-26-445725 |
| Document: 0001193125-26-445725-index.html | 0001193125-26-445725 |
| Document: 0001193125-26-445725.txt | 0001193125-26-445725 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Nov 5, 2026 today | Insider Cluster | No price | awaiting T+60 | awaiting T+60 | No price |
Nov 4, 2026 1d ago | 144 | $77.61 | awaiting T+60 | awaiting T+60 | $72.08 (−7.13%) |
Nov 3, 2026 2d ago | SC 13D/A | $77.56 | awaiting T+60 | awaiting T+60 | $72.08 (−7.07%) |
Nov 3, 2026 2d ago | Insider Cluster | $77.56 | awaiting T+60 | awaiting T+60 | $72.08 (−7.07%) |
Nov 3, 2026 2d ago | 144 | $77.56 | awaiting T+60 | awaiting T+60 | $72.08 (−7.07%) |
Nov 3, 2026 2d ago | 144 | $77.56 | awaiting T+60 | awaiting T+60 | $72.08 (−7.07%) |
Nov 2, 2026 3d ago | 144 | $71.28 | awaiting T+60 | awaiting T+60 | $72.08 (+1.12%) |
Oct 30, 2026 6d ago | 144 | $72.00 | awaiting T+60 | awaiting T+60 | $72.08 (−0.11%) |
Oct 30, 2026 6d ago | 144 | $72.00 | awaiting T+60 | awaiting T+60 | $72.08 (+0.11%) |
Oct 28, 2026 8d ago | 8-K | $68.31 | awaiting T+60 | awaiting T+60 | $72.08 (+5.52%) |
US Market Status
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