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  "documentTitle": "Carvana Co. (CVNA)",
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  "presentationDate": "2019-03-01 00:00:00",
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  "notes": "The slide uses a bar chart to illustrate the widening gap between funding capacity and retail sales, framing it as a critical risk.",
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      "text": "Is anyone prepared to step up to the plate to fill this funding gap as Carvana continues to fail to turn a profit? Will the credit cycle turn for the worse between now and then, which could make capital extremely hard to come by for a junk-rated borrower like Carvana? Will evidence of concerning behavior by the Company cause buyers of Carvana's receivables – or stock – to pull out?",
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      "text": "Carvana is currently burning hundreds of millions in cash and hugely dependent on third-party funding to finance its growth.",
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      "text": "Loans Carvana Originates & Total Funding Capacity",
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      "text": "After taking such an exhaustive view of Carvana's funding situation, it's worth taking a step back to understand the significance of all of this detail. Carvana is currently burning hundreds of millions in cash and hugely dependent on third-party funding to finance its growth. Until now, Ally has been the primary provider of third-party financing for Carvana, but it has likely primarily absorbed Carvana's highest-FICO loans. Meanwhile, the Company appears to be realizing vastly off-market returns on its sale of subprime auto loans to its other financial backers – yet management won't reveal their identities, leaving us wondering whether this funding is sustainable. Perhaps they are wagering that the company can achieve self-sustaining profitability before capital runs dry – but, with Ally now beginning to reduce its funding, we believe that Carvana's heavy dependence on irrational third-party financing could catch up with it before it can turn a sustainable profit. Any of the concerns which we illustrate in this report – the Company running afoul of consumer protection laws, issuing GAP waiver coverage in states in which it is not authorized to do so, etc. – could also cause capital providers to flee preemptively, creating a cash crunch which could ultimately sink Carvana.",
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      "kind": "title",
      "text": "Carvana Recap: Can Carvana's Uneconomical Loan Selling Arrangements Persist As It Grows Increasingly Dependent On New Financing?",
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