
TrueCar Shares Rebound Since Late Summer Shakeup of C-Suite
Investors are coming back to TrueCar (TRUE) - Get Report , albeit cautiously, following the exit of its top executives last summer.
Shares of the digital vehicle-buying platform have risen more than 22% since the announcement in early August that Scott Painter, a co-founder and CEO, had decided to step down by year's end.
The company's spokesman, Alan Ohnsman, said on Thursday that the CEO search "continues, but there's nothing to announce at the moment."
Painter's announcement came after a tumultuous period of litigation and acrimony with dealers, shareholders and a trade association. A month later, John Krafcik, the company's president, said he was leaving to lead Google's autonomous car project.
Last week, the company posted third-quarter financial results that included 28% higher revenue and a narrowed loss. The number of cars purchased through dealer partners of TrueCar numbered 208,034, up 21% from a year earlier and the most in the company's history.
Mike Guthrie, chief financial officer and interim chief operating officer, in a prepared statement expressed pleasure "with our execution and financial performance for the quarter." He added that he was "particularly excited with the performance of our affinity partner channels this past quarter, where we had healthy growth rates across all of our key metrics."
According to Zacks Investment Research, equity analysts remain cautious on the stock. Of the six recommendations, five are neutral and one suggests selling the stock. Ohnsman said the company is committed to improving relations with car dealers, which had suffered.
TrueCar, with its dealer partners, acts as a go-between for consumers gathering information about automobiles via the Internet and collects a commission when a sale is made. Disagreement has arisen over state laws barring brokers, as well as over acquisition of sales data from dealers.
Car dealers, who control the franchise to sell vehicles as retailers in the U.S., remain divided about the precise role of digital technology in their operations. With consumers doing more and more research online, some retailers are experimenting with the means of reserving and ordering vehicles via the Web.
In May 2014, TrueCar raised $70 million in an initial public offering. Shares initially were priced in the $12-14 range and began trading at about $9. Later last year, shares twice traded close to $25.
The share price began sliding at the beginning of this year, bad news reaching a climax in early July when AutoNation. (AN) - Get Report, the biggest publicly owned chain of dealerships, announced it was parting ways with TrueCar over a contract dispute. AutoNation in 2014 announced that it is investing $100 million in an online system for inspecting dealer inventories and reserving and ordering new and used vehicles.
Doron Levin is host of "In the Driver Seat," broadcast on SiriusXM Insight 121, Saturday at noon, repeated Sunday at 9 a.m.
The writer has no financial interest in the aforementioned companies.








