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TrueCar IPO Falls Short of Expectations -Then Rebounds

After dropping price, traders quickly drive shares back up.

by on May.16, 2014

John Krafcik, third from left, TrueCar president, and Scott Painter, founder and CEO of TrueCar, right of Krafcik, celebrate the its debut on the NASDAQ.

With some of the fizz going out of internet stock in recent weeks, the initial public offering of stock by auto buying service TrueCar fell short of its own, cautious expectations as it began its first day of trading — but then quickly rebounded.

Initially expected to command between $12 and $14 per share when shares began trading today, they actually wound up launching under the NASDAQ symbol “TRUE” at a much more modest $9.00. Considering the nearly 8 million shares of common stock TrueCar offered, it will have raised about $70 million, down from initial expectations of somewhere around $100 million.

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The firm expects to use the cash it did raise for expanding its business operations and possibly making additional acquisitions according to the company’s Securities and Exchange Commission filings. It purchased the influential ALG, the former Automotive Leasing Guide, two years ago.

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TrueCar Files for IPO as Former Hyundai CEO Krafcik Joins Board

Shopping service looking to raise $125 million.

by on Apr.04, 2014

TrueCar wants cash to grow its operations.

Online automotive shopping site TrueCar.com has announced plans to go public – a significant turnaround for a service that some thought might not survive a series of legal challenges that forced the company to make some major changes to its business model over the last two years.

TrueCar revealed it had filed the necessary paperwork – known as a Form S-1 – with the Securities and Exchange Commission  just a day after it announced that former Hyundai Motor America CEO John Krafcik had joined the company’s board of directors.

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Though the firm’s management could not comment about the IPO due to federal guidelines, the planned stock offering is expected to raise as much as $125 million which would be used to further expand the firm’s aggressive growth plans.  TrueCar previously  raised significant funds through private equity offerings, including a $30 million investment by Vulcan Capital, the investment arm of Microsoft co-founder Paul Allen.

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TrueCar Reinvents Itself

Aiming to keep both customers and dealers happy.

by on Dec.18, 2012

TrueCar's Scott Painter has lost a lot of money -- and weight -- while trying to fix the company's problems.

For a businessman, there are few things worse than having to start all over again – unless it involves losing millions of dollars in the process.

But few in the auto industry have had more experience reinventing themselves than Scott Painter, a serial entrepreneur who has repeatedly come up with concepts aimed at rethinking the way cars are sold. Among the companies to his credit are CarsDirect and TrueCar.

The latter website made waves when it began offering U.S. car buyers the sort of deep, insider pricing information that hadn’t previously been made public, including not only data on what dealers really paid for a vehicle but also the lowest prices that customers were getting away with paying.

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Not surprisingly, that didn’t sit well with retailers who accused TrueCar of violating various strict franchising laws.  Notably, states like Texas and Virginia bar so-called “bird-dogging,” or auto brokering, where a third party steps in to help a customer get a better price.

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TrueCar Yields to Critics and Regulators

Facing mounting legal hurdles, pricing service plans “sweeping changes.”

by on Jan.17, 2012

TrueCar founder Scott Painter is promising "sweeping changes" to the site's business model.

Scott Painter has never been one to readily yield to his critics, but with state regulators taking aim and a series of huge legal battles looming across the country, the Internet car sales pioneer has backed down, announcing “sweeping changes” to the way his latest venture, TrueCar.com, operates.

The service has generated significant buzz – and plenty of traffic – since its launch, promising to provide consumers with what it has claimed to be the most accurate pricing data online.  Dealers, in turn, were provided an alternative model to attract customers.  Instead of paying for leads, as is the case with most online auto sites, they only paid a $300 fee whenever a car was actually sold.

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TrueCar’s approach has generated strong support in some quarters – but plenty of criticism elsewhere.  And angry dealers, always a force to be reckoned with, were able to rally support in a number of states where TrueCar appeared to be running afoul of strict franchising laws.  Notably, states like Texas and Virginia bar so-called “bird-dogging,” or auto brokering, where a third party steps in to help a customer get a better price.

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