The used-car e-commerce platform Carvana Co. (NYSE: CVNA) is planning to do something it has never done before: split its stock.
If completed, the move will significantly reduce the per-share price of CVNA stock, without affecting the company’s total value. But first, it needs to be approved by shareholders.
Here’s what you need to know about Carvana’s proposed stock split.
What is a stock split?
A stock split is a mechanism by which a company can increase or decrease the number of its shares by dividing those shares or combining them.
There are two types of stock splits: a forward split and a reverse split. A forward split is the most common, and the type that Carvana is proposing.
In a forward split, an individual share is divided into additional shares, reducing the value of each share. A forward split is usually just referred to as a “stock split.”
On the other side of the coin, you have a reverse split. These are less common than forward splits. In a reverse split, multiple existing shares of a stock are combined into a single share, making each new share more valuable because there are fewer of them.
While both types of splits change the value of a single share, they do not inherently affect the company’s overall market cap. This is because the total number of new shares and their new stock price still equals the same sum as the former number of shares and their price.
For example, take an imaginary company, XYZ, with 1,000 outstanding shares each worth $100. The total value of the company, its market cap, is thus $100,000.
But then XYZ decides to split its shares by a factor of 10-to-1. This increases the company’s 1,000 outstanding shares to 10,000, yet because there are now 10 times more shares, each share is worth 10 times less, so the company’s market cap remains $100,000.
How much is Carvana splitting the stock by?
Carvana has announced that it intends to split its stock 5-to-1.
Last week, the company said that its board had approved the split at that ratio. That means that once the split takes place, there will be five times as many CVNA shares outstanding as there were before the split.
However, since there will be five times as many shares, the post-split share price of CVNA stock will be five times lower than its pre-split price.
When do Carvana’s shares split?
It’s important to note that Carvana’s share split isn’t guaranteed. While the company’s board has approved the split, shareholders still need to vote on the move. If shareholders also approve the split, the company’s stock split will proceed.
In a release announcing the proposed split, Carvana said that shareholders will be able to vote on the stock split at the Annual Meeting of Stockholders on May 5, 2026.
If they approve the split, investors who own Class A and Class B common stock will receive an additional four CVNA shares for every share they currently own after the closing bell on Wednesday, May 6.
When markets reopen on Thursday, May 7, CVNA shares will begin trading at their new split-adjusted price.
What will Carvana’s new split-adjusted stock price be?
That’s unknowable for now because no one knows what Carvana’s stock price will be seven weeks from now when the adjusted price would kick in.
For now, all we can say for certain is that, if shareholders approve the split, the split-adjusted price will be one-fifth of the pre-split price.
Currently, CVNA stock is trading at around $290 per share. Assuming CVNA trades at that price at the close of markets on May 6, Carvana’s post-split stock price would open at around $58 per share on May 7.
Why is Carvana splitting its stock?
Given that stock splits don’t change the fundamental value of the company—or inherently make existing investors any richer—many wonder what the benefit of a stock split is.
The greatest benefit to a forward stock split is that it lowers the cost of buying into the company for new investors. This is especially true for retail investors who may not have hundreds each month to sink into a new stock.
If a person only has about $150 a month to invest in the market, Carvana, at its current share price of around $290, is unaffordable for them.
But if CVNA shares are suddenly at $58 each, that same investor could scoop up at least a few shares. And if enough retail investors do this, it could actually help boost the overall stock price—triggering a wave of fresh investment in the company’s shares.
Another reason companies typically split their shares is to make them more affordable for the company’s own employees, who often participate in employee stock purchase plans (ESPP). If a company’s share price is lower, employees can get more shares via their ESPP contributions.
This often increases employee loyalty within the company and can be a motivating factor in their work. After all, if you own shares in the company you work for, you want that company to do as well as possible so those shares continue to rise.
Indeed, when announcing the proposed stock split, Carvana chief financial officer Mark Jenkins said, “This is the first split in Carvana’s history, and we believe it achieves the important goal of keeping our stock accessible to all of our team members.”
How have Carvana’s shares performed in 2026?
CVNA shares have had a rough start to 2026. While the company’s share price climbed to over $480 in January, it has since seen a massive decline.
The stock took its greatest hit this year in February after Carvana reported its Q4 2025 earnings.
While the company did achieve net revenue growth of 58% to $5.6 billion, it missed hard on adjusted EBITDA, which came in at $511 million. As a result, the company’s stock price fell nearly 16% in one day.
Since then, CVNA shares have continued to be hit, largely due to a relatively bearish market for growth stocks, especially after America’s attack on Iran and the ongoing economic uncertainty.
Yesterday, CVNA shares fell nearly 7.5% to $291.17.
Year-to-date, CVNA shares are now down 31% as of yesterday’s close. Yet, over the past 12 months, Carvana has performed remarkably well. Since this time last year, CVNA shares have risen nearly 75%.
