GARCIA ERNEST C. II 4
4 · CARVANA CO. · Filed May 1, 2026
Research Summary
AI-generated summary of this filing
Carvana (CVNA) 10% Owner Ernest C. Garcia II Sells Covered Calls
What Happened
- Ernest C. Garcia II, a 10% owner of Carvana (through ECG II SPE, LLC or "E‑SPE"), sold (wrote) 4,000,000 European-style covered call options on May 1, 2026 in two tranches of 2,000,000 each (exercise prices $450 and $500), receiving a cash premium of $68.0575 per option (total ≈ $272,230,000; each 2M tranche ≈ $136,115,000). Separately, 4,000,000 previously sold covered calls expired unexercised on April 17, 2026 (no proceeds on expiration).
Key Details
- Transaction dates & prices:
- Apr 17, 2026: Expiration of 4,000,000 short derivative positions (previous covered calls) — expired out of the money, $0.
- May 1, 2026: Sold 2,000,000 covered calls @ $68.0575 (reported as $68.06) — proceeds ≈ $136,115,000 (twice, total ≈ $272,230,000).
- New covered calls expire May 21, 2027; strikes: $450 (2M) and $500 (2M).
- Shares owned after transaction: not specified in this filing.
- Filers & control: The options were sold by E‑SPE, an entity wholly owned and controlled by Mr. Garcia (F1).
- Collateral/pledge: E‑SPE pledged 4,000,000 Class B shares and 5,000,000 Carvana Group LLC Class A units to secure obligations; E‑SPE retains voting and dispositive power subject to the pledge (F5).
- Filing notes: This Form 4 was filed voluntarily and reports the expiration in advance of what otherwise could appear on Form 5 (F2). The filing appears timely (reporting period 2026-05-01; filed 2026-05-01).
Context
- These entries reflect derivative activity (writing covered calls), not direct open-market sales of common stock. E‑SPE received substantial cash premiums now but can be obligated to sell underlying shares if the options are exercised at the strike prices before/at expiration. For retail investors, covered-call writing is an income strategy that limits upside above the strikes; as a 10% owner, Mr. Garcia is acting through an entity he controls rather than making a standard executive open‑market trade.
Insider Transaction Report
Form 4
CARVANA CO.CVNA
GARCIA ERNEST C. II
10% Owner
Transactions
- Expiration
Covered Call Option (Obligation to Sell)
[F1][F2][F3]2026-04-17−4,000,000→ 0 total(indirect: By LLC)Exercise: $400.00Exp: 2026-04-17→ Class A Common Stock (4,000,000 underlying) - Sale
Covered Call Option (Obligation to Sell)
[F4][F5][F1]2026-05-01$68.06/sh−2,000,000$136,115,000→ 2,000,000 total(indirect: By LLC)Exercise: $450.00From: 2027-05-21Exp: 2027-05-21→ Class A Common Stock (2,000,000 underlying) - Sale
Covered Call Option (Obligation to Sell)
[F4][F5][F1]2026-05-01$68.06/sh−2,000,000$136,115,000→ 2,000,000 total(indirect: By LLC)Exercise: $500.00From: 2027-05-21Exp: 2027-05-21→ Class A Common Stock (2,000,000 underlying)
Footnotes (5)
- [F1]The covered call options represented the option holder's right to purchase, and the option seller's obligation to sell, the underlying shares at the specified strike price. The covered call options were held directly by ECG II SPE, LLC ("E-SPE"), an entity wholly owned and controlled by Mr. Garcia.
- [F2]This Form 4 is being filed on a voluntary basis to report, in advance, the expiration of the covered call options that would otherwise be reportable on Form 5 for the year ended December 31, 2026.
- [F3]On May 9, 2025, E-SPE entered into a European-style covered call option transaction with an unaffiliated third-party purchaser. Under the terms of the transaction, E-SPE sold 4,000,000 covered call options, each referencing one share of the Issuer's Class A common stock, exercisable only on the expiration date, with an expiration date of April 17, 2026. In exchange for selling these options, E-SPE received a cash premium of $24.75 per option, which was paid in May 2025. The options were out of the money on the expiration date and expired without being exercised.
- [F4]On May 1, 2026, E-SPE entered into a European-style covered call option transaction with an unaffiliated third-party purchaser. Under the terms of this transaction, E-SPE sold 4,000,000 covered call options, comprised of 2,000,000 covered call options with an exercise price of $450.00 and 2,000,000 covered call options with an exercise price of $500.00, each referencing one share of the Issuer's Class A common stock, with an expiration date of May 21, 2027. In exchange for selling these options, E-SPE received a cash premium of $68.0575 per option.
- [F5]E-SPE pledged 4,000,000 shares of the Issuer's Class B common stock and 5,000,000 units of Carvana Group, LLC Class A units (collectively, the "Pledged Shares") to secure its obligations under the transaction. During the term of the pledge, E-SPE retains the right to vote the Pledged Shares and retains investment/dispositive power over the Pledged Shares, subject to the terms of the pledge arrangements.