{
  "docId": "019dd923-622c-750b-8b98-98685acdea95",
  "docSlug": "11e962264b36",
  "documentTitle": "Carvana Co. (CVNA)",
  "authorId": "54_Spruce_Point_Capital",
  "authorName": null,
  "documentKindSlug": "activist-deck",
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  "sourceTypeSlug": "short_seller",
  "sourceTypeLabel": "Short seller",
  "presentationDate": "2019-03-01 00:00:00",
  "orientation": "landscape",
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  "pageNumber": 30,
  "pageCount": 98,
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  "slideType": "expose_contradiction",
  "function": "expose_contradiction",
  "density": "dense",
  "nDataPoints": 2,
  "notes": "Uses Reddit and customer review screenshots as primary evidence to contradict management's growth narrative.",
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      "kind": "callout",
      "text": "By defining its market presence as the area within which it offers free delivery – even when in-market deliveries will require a fee in many cases, when it still offers delivery outside of its 'markets,' and when it reimburses out-of-market customers to fly in – we question the significance of 'entering a new market' with respect to Carvana's growth trajectory. We believe that Carvana's true coverage is effectively greater than the numbers cited by management (55.8% of the US population, per its most recent shareholder letter), and therefore that its runway for ongoing market penetration is not as robust as characterized by management.",
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      "kind": "callout",
      "text": "By defining its market presence as the area within which it offers free delivery – even when in-market deliveries will require a fee in many cases, when it still offers delivery outside of its “markets,” and when it reimburses out-of-market customers to fly in – we question the significance of “entering a new market” with respect to Carvana’s growth trajectory.",
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      "text": "Reddit and customer review screenshots",
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      "kind": "paragraph",
      "text": "Carvana opened in 41 new markets in FY 18, slightly beating its announced guidance of 30-40 per its Q4 FY 17 shareholder letter. But what is the significance of 'opening a new market' when Carvana also ships out of market? Carvana defines its markets as the locations in which it offers free delivery (vs. a shipping fee of roughly $100-$500 for out-of-market delivery, depending on location). Yet we note that Carvana appears to charge the same delivery fee to customers within its markets if the car has to be shipped from another location, even if reasonably closeby. Carvana also offers to reimburse airfare up to $200 to out-of-market customers who fly in to pick up their car at their nearest vending machine.",
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      "kind": "quote",
      "text": "Customer service questionable — Lynn T., Brentwood, TN, Jan 27, 2019",
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      "kind": "title",
      "text": "How Much More Runway Is There For Market Penetration?",
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      "evidence": "Contradicts management's market penetration claims using anecdotal customer evidence.",
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      "arcName": "Overcoming the Monster",
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      "evidence": "The deck presents various challenges and obstacles faced by Carvana, including regulatory concerns and governance issues.",
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