Online used-vehicle retailer Carvana, which has lost money since it went public in 2017, is using a combination of equity and debt to raise more than $500 million in funding.

Carvana on Monday proposed the sale of 3.5 million shares of Class A common stock and said it expects to grant underwriters the right to buy up to 525,000 additional shares. That equity amounts to about $270 million based on the stock's $67.18 closing price Monday. On Tuesday, Carvana's stock opened at $65.25 and closed at $67.

Along with the equity offering, Carvana said it is offering $250 million of additional 8.875 percent senior notes due in 2023 in a private offering.

The money will be used "for general corporate purposes," Carvana said Monday.

"Carvana may use the net proceeds from these offerings to partially repay borrowings under its floor plan facility until it identifies other specific uses," the company said in a release.

In a note to investors, Morgan Stanley said it calculates the additional capital should provide Carvana with enough cash to operate through the second half of 2020. Morgan Stanley maintains an "underweight" rating, the equivalent to a "sell," on Carvana's stock.

Morgan Stanley analyst Armintas Sinkevicius wrote that the firm remains "constructive" on Carvana's ability to disrupt the used-car dealership model. But, he added, "We believe that it will take longer for this business to scale than the Bulls think, and we are concerned about profitability in the meantime."

Carvana's top-line revenue and vehicle unit sales are growing rapidly , and the retailer has shown improvement in its gross profit per unit. But the company has yet to report a net profit since going public in April 2017.

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