Used car retailer Carvana Co. (NYSE:CVNA) has rejected the Michigan Department of State’s decision to suspend its operations in a suburb of Detroit, claiming that the action was too harsh for “minor administrative issues.”
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On Friday, Michigan authorities alleged that the vending-machine-type dealership violated several laws, such as destruction of title applications, improper maintenance of odometer records, inefficient practices involving, temporary registrations, and failure to abide by deadlines to submit records.
The company stated on Monday that most of the issues related to paperwork have been rectified and the rest is in the process of being corrected through consultation, and legal or judicial remedies. Carvana opposed the harsh and quick judgment on Michigan’s part over trivial issues.
Michigan’s suspension comes at a time when the demand for used cars is facing the double whammy of normalizing production trends of new cars (which is denting used car demand) and high-interest rates on car loans.
Shares of the company tumbled 5.5% at the market close Monday. The CVNA stock is down 92.4% this year to date.
Is CVNA a Buy?
Carvana stock is a Moderate Buy on Wall Street, based on nine Buys, nine Holds, and one Sell. The average price target is $53.47%, indicating that the CVNA stock can still go up about 194% from its current price over the next 12 months.
