Used-car marketplace Carvana said on Friday that it will implement a 5-for-1 stock split, dividing each share into five separate shares. The Tempe, Arizona-based online seller - recognized for its large vehicle vending machines - characterized the split as a step toward keeping shares within reach for all team members. The stock rose 2.8% on the day the split was announced.
The company said trading will begin on a split-adjusted basis at market open on May 7. Stock splits are commonly used by corporations to reduce the per-share trading price and make shares more accessible to a wider array of investors, particularly individual retail buyers. Such moves can also improve liquidity and broaden the shareholder base.
The split announcement follows a period of operating challenges. In recent weeks Carvana missed analysts' estimates for quarterly profit, with the company citing rising vehicle reconditioning and higher depreciation costs. These cost pressures were described as stemming from the trickle-down effects of inflation and tariffs.
Despite those headwinds, Carvana could be positioned to benefit from a shift in consumer demand toward used cars as inflation-pressured buyers delay purchases of new vehicles. Market performance earlier in the year has been mixed. Including the session's gains tied to the split announcement, the company's shares have declined 29% year-to-date.
Looking at a longer lens, the stock more than doubled in 2025 and the company gained inclusion in the benchmark S&P 500 index. The split is Carvana's first and is framed by management as an effort to maintain accessibility for employees while also potentially widening the investor base.
Trading details - Split-adjusted trading to begin at market open on May 7.
Recent performance - Shares rose 2.8% on the announcement; down 29% so far this year; more than doubled in 2025 and added to the S&P 500.