TrueCar IPO Pricing, Valuation Revealed
Automotive pricing site TrueCar has revealed its IPO price will be set between $12 and $14, bringing the company a valuation of around $1 billion should the price-per-share lean closer toward the top end.
The Wall Street Journal reports the IPO’s 7.78 million available shares — to be listed on NASDAQ as “TRUE” – could raise as much as $108.9 million once shares are made available.
Beyond the IPO, TrueCar will have 71 million shares outstanding; if priced at $14/share, the company’s market valuation will be $994 million.
Lead underwriters of the IPO are Goldman Sachs, J.P. Morgan and RBC Capital Markets.
Seattle-based writer, blogger, and photographer for many a publication. Born in Louisville. Raised in Kansas. Where I lay my head is home.
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I'm very interested in watching how this all plays out. The dealership networks are starting to push back hard on the third party/referral sites and a number of the larger chains have have already dropped them entirely in lieu of managing their own online presence. I can completely understand why they're going this route, I'm just interested to see how it plays out. Scuttlebutt is that what TrueCar is looking to do is build a brand and start moving into financing, leasing, warranty coverage, etc. That's the real profit center of the new car business and it's got the dealerships understandably nervous. What the dealership chains are looking to avoid more than anything is momentum building to tear down their legal protections. With public support seemingly behind Tesla and rumors that TrueCar is even looking to move into the retail space on top of the finance space, this could be the beginning of the end for those nice barriers the dealerships have put up to protect themselves. Then again, we've seen this play out over the years with other new entrants, only to fizzle out, so....
What sort of earnings does TrueCar have to justify this lofty valuation? I can't find anything on them.
How are they different from CarsDirect, other than a prettier website? I used CarsDirect a couple times and it was great.
With IPO's, who knows. Disruptive businesses aren't necessarily profitable. That is, it is possible to depress auto retail margins without being able to capture much or any of it.