By the end of 2022, Kavana ended its eight-year streak of improving profit margins. Despite doubling its vehicle sales compared to 2019, the company's annual losses surged to nearly $2.9 billion. Now, it has rebounded from the brink of bankruptcy, achieving record revenue and per-unit gross profit earlier this year.
Three years ago, its stock traded below $4 per share, only to plummet 98% in 2022. Later this month, Kavana will join the S&P 500 (^GSPC), capping off an astonishing 11,000% rally that has left short sellers reeling.
With its inclusion, Kavana joins Robinhood Markets (HOOD) and Coinbase Global, Inc. (COIN)—two other companies that suffered steep declines during the 2022 bear market before staging strong comebacks.
**"We Didn't Fall Apart"** In 2022, soaring interest rates, high inflation, and a crypto winter dragged the S&P 500 down 19%, marking its worst performance since the financial crisis and one of its bleakest years outside of recessions.
Kavana, Robinhood, and Coinbase were at the epicenter of this storm.
After posting its first full-year profit in 2024, Kavana’s CEO and Chairman Ernie Garcia reflected on the company’s survival. "It’s incredibly difficult for a team to endure the pressures of the past two years without breaking apart," he said. "But we didn’t fall apart."
Even Morgan Stanley analyst Adam Jonas, who once warned the stock could drop to $0.10, upgraded it to "Overweight" in May, calling it the "Amazon of auto retail." By October, he projected Kavana’s share of the U.S. used-car market would rise from 1.5% today to 12% by 2040.
Ihor Dusaniwsky, Managing Director at S3 Partners, told Yahoo Finance: "Kavana short sellers have endured a wilder ride than Coney Island’s Cyclone. Since hitting its 2022 low, mark-to-market losses for shorts total $8.44 billion."
**Robinhood’s Turnaround** Robinhood Markets (HOOD), the iconic platform of the 2021 meme-stock frenzy, also staged a dramatic recovery. After joining the S&P 500 in September, its year-to-date gains rank fourth among index components.
Its stock has surged 1,450% from its 2022 low of around $7, amid acquisition rumors and deep cost-cutting, including founders Vlad Tenev and Baiju Bhatt forfeiting $500 million in bonus contracts to accelerate profitability.
Such austerity proved critical: While 2022 revenue fell 25%, operating expenses dropped 31%. To qualify for the S&P 500, companies must post four consecutive profitable quarters and a market cap above $22.7 billion—a threshold Robinhood cleared in 2024, ending three years of losses.
"They’ve matured in understanding institutional investors’ needs, scaling the business, and achieving high profitability," said Citizens JMP analyst Devin Ryan.
Over the past year, Robinhood has expanded its "super app" with features like tokenized stocks and its fastest-growing segment—prediction markets. CEO Tenev even floated managing a proposed "$1,000 Trump baby bond" through the platform.
**Coinbase’s Institutional Push** Coinbase Global, Inc. (COIN), the world’s largest crypto exchange and Robinhood’s rival, is also rolling out new products for its "all-in-one exchange," including tokenized assets and prediction markets.
In May, Coinbase became the first crypto-native company added to the S&P 500—a dramatic reversal for a firm once under intense SEC scrutiny and litigation.
"Inclusion signals crypto is here to stay," CEO Brian Armstrong told Yahoo Finance earlier this year.
Q3 revenue jumped 54% YoY to $1.87 billion, with EPS rising from $0.28 to $1.50. Retail trading volume hit $59 billion, up 37% sequentially. Though its year-to-date gains faded after October’s crypto sell-off, Citizens’ Ryan remains bullish, citing its institutional focus and reputation as "the AWS of blockchain."
"Coinbase leverages over a decade of expertise to help clients access blockchain," he said. Despite crypto’s slump, Wall Street sees the Market Structure Transparency Act as the next major catalyst.
"These companies succeeded by relentlessly betting on the future they believed in," Ryan noted.
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