$1.4B of Carvana Stock, Transparency Gap Closing, Dual IHOP-Applebees

The Automotive Troublemaker w/ Paul J Daly and Kyle Mountsier

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Happy Veteran’s Day and thank you to all who have served! Today we’re talking about Ernie Garcia II cashing in on $1.4B of Carvana stock, a new Capital One study highlighting the role of trust and transparency in the car buying process and an IHOP-Applebees shared location.

Show Notes with links:

• Ernie Garcia II, father of Carvana CEO Ernest Garcia III, has strategically sold $1.4 billion of Carvana stock since April, benefiting from a notable rally in the company’s share price amid an impressive restructuring turnaround.
  • Garcia II has offloaded nearly 10 million shares, transitioning his Class B voting stock into Class A shares for liquidation.
  • He still controls 69.2 million Class B shares, making up the core of his $17.6 billion fortune.
  • Garcia’s last major sell-off was in 2021 when Carvana shares peaked, raising questions on the timing of his sales.
  • The stock’s rebound from under $4 at the end of 2022 to around $240 has renewed confidence in the company’s trajectory.
  • Nejat Seyhun, a finance professor at the University of Michigan, said “He might just have other alternatives and other investments… or maybe he expects the stock could fall—it’s better to sell early than late.”

• Capital One's 2024 Car Buying Outlook highlights the role of trust and transparency in car buying, emphasizing the opportunity for dealers to bridge the digital and in-person experience.
  • 88% of buyers complete at least half of the car buying process in person, up 5% from 2023, underscoring the dealership’s essential role.
  • Digital tools are popular for early steps, with most buyers researching models, inventory, and financing options online before heading to the dealership.
  • Trust drives loyalty: buyers are more than twice as likely to return to a dealer they trust, with 48% willing to pay more if they feel secure in the relationship.
  • Transparency is key: while 73% of dealers see the process as “very transparent” or “completely transparent”, only 55% of buyers agree.
  • “In a time when the ways cars are designed, sold, and purchased are rapidly evolving, the one thing buyers and dealers should see clearly from the start is each other,” says Sanjiv Yajnik, President of Financial Services at Capital One.

• Applebee’s and IHOP are launching their first-ever dual-branded location in the United States, set to open in Seguin, Texas, in early 2025.
  • The Seguin site will combine Applebee’s lunch and dinner with IHOP’s breakfast and brunch, maximizing both brands' peak hours.
  • With a shared kitchen and cross-trained staff, this setup aims to cut costs and improve profitability, potentially supporting struggling locations.
  • The site will feature a drive-thru to meet demand for off-premises dining.
  • Dine Brands plans to roll out up to 15 dual-branded locations in the U.S. “The addition of a second brand may improve unit economics,” said CEO John Peyton, viewing it as a smart strategy for growth.
  • Dual-branding has gained popularity in hospitality

Hosts: Paul J Daly and Kyle Mountsier
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