Interesting: TrueCar said to consider IPO for next year

Have y'all seen this article in Automotive News?

 

The $1.5 BILLION valuation just astounds me. Would TrueCar going public bring more transparency to their business model and/or validate their "change of heart"?

 

"TrueCar said to consider IPO for next year"

 

"NEW YORK (Bloomberg) -- TrueCar Inc. is considering selling shares in an initial public offering in the first half of 2014, two people with knowledge of the matter said.

The online auto-shopping service is working with Goldman Sachs Group Inc. and JPMorgan Chase & Co. on the IPO, said the people, who asked not to be identified because the process is private. TrueCar, based in Santa Monica, Calif., may seek a market value of as much as $1.5 billion in the share sale, one person said.

Auto sales are on pace for their best year since 2007, and shares of some auto dealership groups have reached record highs this year. AutoNation Inc. is up 24 percent in 2013, after touching a record in September, while Penske Automotive Group Inc. is up nearly 42 percent through Friday.

TrueCar helps consumers buy cars with pricing information from more than 6,000 dealerships. It was started in 2005 by Scott Painter, who also founded CarsDirect.com Inc. and was an early adviser to electric-car maker Tesla Motors Inc. The company turned down an offer to be acquired for more than $1 billion, Painter, who is also CEO of the company, said in a Nov. 19 interview in Los Angeles.

The company currently has 325 employees and is profitable, Painter said. He declined to name the potential buyer or provide the company's expected revenue this year.

He also declined to comment on the possibility of an IPO, as did spokesmen for TrueCar, Goldman Sachs and JPMorgan.

TrueCar raised $200 million in September 2011 to fund acquisitions, Painter said at the time. TrueCar's shareholders include Andell Holdings LLC, GSV Capital Corp., GRP Partners and USAA Capital Corp, according to the company's Web site."

 

 

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Tags: IPO, article, automotive, news, truecar

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Comment by David Ruggles on November 26, 2013 at 10:48am

TrueCar seems to be trying to pump profits in anticipation of their IPO.  After losing $70 million last year, they have a lot to make up. 

Scott Painter still wants to make a fortune by demonizing dealers, IMHO.  He thinks buyers should be able to know dealer's bare costs and railed against OEM trunk money incentives at a recent conference.  He also thinks "friction" in the purchase process keeps people from buying a new vehicle.  According to Painter, we could be selling at a 20 million SAAR if not for the "friction," something he is trying to eliminate for the good of everyone.  He is a classic example of someone who needs the actual experience of dealing with consumers before setting out to change the process.  TrueCar gains their revenue from dealers.  Absolute transparency results in "disintermediation."  This doesn't add up.

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