ACV Auctions Stock Plummets Nearly 15% This Week: What’s Driving the Selloff?
Another week, another traditional stock getting hammered while crypto assets continue outperforming legacy markets. ACV Auctions just joined the club of double-digit decliners.
The Bloodbath Breakdown
Traders dumped shares relentlessly throughout the week, slicing nearly 15% off the stock's value. No major news triggered the selloff—just another case of weak hands folding under minimal pressure.
Meanwhile, Bitcoin's holding strong above key support levels and DeFi protocols are printing actual yields instead of hoping for stock buybacks. But hey, at least traditional investors get to enjoy those quarterly earnings calls and SEC filings.
When legacy markets wobble like this, smart money knows where to find real alpha—and it ain't in auction stocks.
Client bankruptcy blues
Before market open Wednesday, ACV divulged in a regulatory document that an unnamed customer of its ACV Capital subsidiary had filed for chapter 7 bankruptcy (in which a company, overburdened by debt, sells off assets to reduce the load). ACV Capital had provided a line of credit to this client, who was unnamed. The outstanding amount of the credit line was roughly $18 million, the company said.
Image source: Getty Images.
ACV said these borrowings are secured by vehicles. However, it added, it will continue "to assess the status and valuation of the collateral and any necessary provision for doubtful receivables relating to these loans."
Given this status, ACV wrote that it expects to book a loss from the situation. At the moment, it cannot accurately determine the amount of the shortfall. It said that it intends to use all means at its disposal to "protect its interests."
Second-quarter shocker
The timing of the disclosure wasn't ideal, as it came less than one month after ACV published dispiriting second-quarter results. The company posted a surprise net loss for the period, and missed the average analyst estimate for revenue. Its third-quarter top-line guidance also fell short of the prognosticator consensus.
