US used car retail platform Carvana shares fall 49% in two days, hitting record low

U.S. used car retail platform Carvana Co (NYSE:CVNA) closed down 15.64 percent at $7.39 on Monday, with shares hitting a record low. Data show that Carvana shares fell nearly 50 percent in two trading days and now have a market capitalization of just $1.3 billion, after Carvana's market capitalization peaked at $60 billion.

Consumer demand for used cars has been hit hard by the Federal Reserve's interest rate hikes that have raised financing costs. The Manheim Used Car Price Index, which tracks U.S. used car prices, fell 10.6 percent in October, the largest drop in the index's history.

On Friday, Morgan Stanley analyst Adam Jonas downgraded Carvana, saying it could be worth as little as $1. The analyst stressed that a deteriorating used car market and a volatile financing and interest rate environment could add significant risk to the company's outlook.

Carvana CEO Ernie Garcia also acknowledged last week that cars are very expensive and therefore particularly sensitive to the interest rate environment.