Shares of used car retailer Carvana Co. (NYSE:CVNA) soared on Thursday, gaining momentum ahead of a potential strike of auto workers against the Detroit Three carmakers General Motors Company (NYSE:GM), Ford Motor Company (NYSE:F) and Stellantis NV (NYSE:STLA, EPA:STLA).
Carvana stock closed up 13.5% at US$55.86, with investors pulling back slightly at Friday’s open with the stock down 2% at US$54.79.
Other used car dealers also benefitted from the potential strike action, as reduced new car output is expected to spur increased demand for used vehicles.
Vroom added 6.7% to US$1.28, and CarMax, Inc (NYSE:KMX) gained 4.1% to US$83.85 at Thursday’s closing bell.
Auto workers officially began their strike at midnight on Friday after the United Auto Workers union and the Detriot Three failed to strike new contract agreements.
About 13,000 of the union’s 145,000 workers walked out on all three automakers simultaneously in targeted strike action.
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