A group of activist hedge funds have been hit hard by a spectacular plunge in the stock price of online used-car dealer Caravana Co, according to a report by Bloomberg, with the company's shares having fallen by 97% in the last year.

The report cites Bloomerg data as revealing that collectively the funds, including Spruce House Investment Management LLC, FPR Partners LLC, 683 Capital Management LLC, Point72 Asset Management LP and KPS Global Asset Management UK Ltd, collectively still own more than a quarter of the company’s shares. 

With Carvana’s fortunes tumbling as used car prices have declined, the report highlights that some investors have already opted to cut their losses. Earlier this year, both Tiger Global Management and D1 Capital Partners decided to sell down their Carvana holdings with the stock then sinking by 80%v following D1's disclosed exit in May.

Caravana, whose tech platform allows customers to buy used cars without leaving their homes, became a hedge fund investment darling during the pandemic. But the company has faced significant headwinds in the past 15 months or with as post-pandemic new vehicle production has picking up as supply chain problems have eased.