America: Carvana Co. has made Ernest Garcia II and his son Ernest Garcia III two of the richest people in America. The elder Garcia is the largest shareholder of Phoenix-based Carvana, the online retailer that sells cars out of massive vending machines. His son, Garcia III, is the company’s chief executive officer. Together they’re worth $21.4 billion.
Shares of the company surged 31% in New York after it projected record revenue and profit margins. The stock has rallied almost 150% this year as Americans have turned to buying household essentials, entertainment and, increasingly, used cars online. Carvana lets customers choose from more than 19,000 cars and complete purchases in as little as 10 minutes. Buyers have the option of picking up their car at more than a dozen vending machines located around the country, using a giant coin. Its revenue doubled to $3.9 billion last year as it sold about 200,000 cars. It now sees a path to 2 million sales a year.
Garcia II is worth more than $15 billion and his son $6.4 billion, which tracks the daily fortunes of the world’s richest 500 people. The company will sell $1 billion of new debt, seizing on the boom in demand for its vehicles and low yields in the corporate bond market. Around $600 million of the proceeds will be used to refinance existing debt, with the rest held as cash on the balance sheet.
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