In 2022, Carvana, Robinhood, and Coinbase were emblematic of stock collapses amid soaring interest rates, high inflation, and industry downturns. Now, these three companies have staged a remarkable turnaround—repairing their balance sheets and securing spots in the S&P 500, transforming from "bankruptcy candidates" to core U.S. equity assets.
Yahoo Finance reports that used-car retailer Carvana will officially join the S&P 500 later this month, capping an astonishing 11,000% rebound from its lows. Earlier this year, cryptocurrency exchange Coinbase and brokerage Robinhood were added to the benchmark index in May and September, respectively.
These inclusions mark a dramatic shift in market sentiment. Once battered and near collapse during the 2022 bear market, these firms now rank among the index's strongest performers.
The turnaround stems from strategic pivots toward profitability after aggressive expansion. To qualify for the S&P 500, companies must post profits over the past four quarters and meet market-cap thresholds (e.g., Robinhood needed over $22.7 billion).
Over two years, rigorous cost-cutting and executive pay adjustments enabled these firms to return to profitability in 2024. This not only crushed short-sellers betting against them but also restored institutional confidence in their business models.
With Carvana's imminent inclusion, these macro-battered companies complete their reintegration into Wall Street's mainstream. Below are their revival blueprints:
**Carvana: From Near-Bankruptcy to Short-Seller Nightmare** Few reversals rival Carvana's drama. In 2022, despite selling twice as many cars as in 2019, its annual losses ballooned to $2.9 billion, ending eight years of margin growth. Shares plunged 98% below $4, teetering near bankruptcy, with Morgan Stanley’s Adam Jonas warning of a potential $0.10 price target.
Debt restructuring and operational efficiency later drove Carvana to its first annual profit in 2024, alongside record revenue and per-vehicle gross profit. The rebound devastated short-sellers, who lost $8.44 billion since 2022’s lows, per S3 Partners’ Ihor Dusaniwsky.
CEO Ernie Garcia noted surviving such pressure without collapse was rare. Even Jonas upgraded Carvana to "overweight," projecting its used-car market share could jump from 1.5% to 12% by 2040, dubbing it the "Amazon of auto retail."
**Robinhood: Founders’ Sacrifice Fuels Profitability** The meme-stock darling of 2021 faced its nadir in 2022, with shares near $7 amid takeover rumors and layoffs. Founders Vlad Tenev and Baiju Bhatt forfeited $500 million in bonuses to slash costs and accelerate profitability.
The austerity worked: While 2022 revenue fell 25%, operating expenses dropped 31%. By 2024, Robinhood achieved full-year profitability, ending three years of losses. Since its S&P 500 debut, shares surged ~1,450% from 2022 lows, poised to be the index’s fourth-best performer this year.
Citizens analyst Devin Ryan highlighted Robinhood’s maturation, now meeting institutional expectations while expanding via a "super app" strategy—including tokenized stocks, prediction markets, and even hosting a potential "Trump account."
**Coinbase: Regulatory Turnaround and Growth Surge** The first of the trio to join the S&P 500 (May 2024), Coinbase’s inclusion signaled a regulatory and market milestone despite past SEC scrutiny over securities law issues.
Q3 2024 revenue jumped 54% to $1.87 billion on rebounding trading volumes, with EPS soaring from $0.28 to $1.50 YoY. Consumer trading volume rose 37% sequentially to $59 billion.
Ryan likened Coinbase to "AWS for blockchain," citing its dual retail-institutional infrastructure moat. Stablecoin legislation and anticipated Market Structure Transparency Act progress are seen as next catalysts for the sector and Coinbase’s stock.
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