SCHEDULE 13D/A: Carvana Entities Update Significant Stake in Root, Inc. to 39.7% Following Issuer's Latest Share Count

Carvana Group, LLC and its affiliates have filed an Amendment No. 9 to their Schedule 13D, updating their beneficial ownership in Root, Inc. to 39.7% of Class A Common Stock, primarily due to a change in Root's reported outstanding shares.

Summary

• Carvana Group, LLC, Carvana Co. Sub LLC, and Carvana Co. (collectively, "Reporting Persons") beneficially own an aggregate of 7,952,386 shares of Root, Inc.'s Class A Common Stock.
• This represents approximately 39.7% of the outstanding shares of Root, Inc.'s Class A Common Stock, calculated based on approximately 12,093,450 shares issued and outstanding as of April 30, 2025, plus the convertible and exercisable shares held by Carvana.
• On a fully-diluted and as-converted basis, this aggregate amount represents approximately 33.7% of the total Common Stock (Class A and Class B) of Root, Inc.
• The reported securities comprise 780,727 shares of Class A Common Stock issuable upon conversion of 14,053,096 shares of Preferred Stock and 7,171,659 shares of Class A Common Stock issuable upon exercise of Exercisable Warrants.
• The amendment was filed to reflect a change in percentage ownership solely due to an update in the outstanding Class A Common Stock reported by Root, Inc. in its Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, filed on May 7, 2025.
• Carvana Group, LLC holds eight tranches of warrants, with three "short-term Warrants" expiring on September 1, 2025, and five "long-term Warrants" expiring on September 1, 2027.
• Three tranches of warrants (Tranche 1, 2, and 3), totaling 7,171,659 shares, have become exercisable upon the achievement of specific milestones related to the integrated automobile insurance solution and insurance sales metrics through Carvana's Integrated Platform.

Sentiment

Score: 5

Explanation: The document is a routine amendment to a Schedule 13D, reflecting a change in reported percentage ownership due to the issuer's updated outstanding share count. It is factual and neutral in tone, providing no inherently positive or negative financial performance information.

Positives

• The continued holding of a significant stake by Carvana suggests an ongoing strategic interest in Root, Inc. and its integrated insurance platform.
• The exercisability of additional warrants (Tranche 2 and 3) indicates the achievement of certain insurance sales metrics through the Integrated Platform, which could be positive for the partnership's progress.

Risks

• The value of the preferred stock and warrants is subject to the performance of Root, Inc.'s Class A Common Stock.
• The exercise of remaining warrants is contingent on achieving additional defined milestones tied to insurance sales through the Integrated Platform, which may not be met.

Future Outlook

The document does not provide forward-looking statements or guidance regarding Root, Inc.'s or Carvana's future financial performance or strategic plans beyond the conditions for warrant exercise.

Industry Context

This filing highlights the ongoing strategic relationship between Carvana, an online used car retailer, and Root, Inc., an insurance technology company. Carvana's significant stake and the conditions for warrant exercise tied to insurance sales through Carvana's platform underscore the importance of embedded insurance solutions in the automotive retail industry. This partnership aims to integrate insurance offerings directly into the car buying process, a trend driven by the desire for seamless customer experiences and potential revenue diversification for auto retailers.

Related Party Transactions

• Carvana Group, LLC, Carvana Co. Sub LLC, and Carvana Co. are related entities, with Carvana Co. being the sole member of Carvana Co. Sub LLC, which is the sole manager of Carvana Group, LLC. This structure implies shared beneficial ownership among these entities.

Stakeholder Impact

• Shareholders: The updated percentage of beneficial ownership (39.7% of Class A Common Stock, 33.7% fully diluted) provides clarity on the significant influence Carvana entities hold over Root, Inc., which could impact investor perception and future strategic decisions. The conversion of preferred stock and exercise of warrants could lead to further dilution for existing shareholders.
• Customers: The continued strategic partnership and the achievement of insurance sales metrics through the Integrated Platform could benefit customers of Carvana by offering integrated insurance solutions.

Next Steps

• The remaining five tranches of warrants are subject to certain conditions to exercise, including relating to the achievement of additional defined milestones tied to insurance sales through the Integrated Platform.

Key Dates

Keywords

Root Inc., Carvana, Schedule 13D, beneficial ownership, Class A common stock, preferred stock, warrants, insurance sales, integrated platform, SEC filing, corporate governance