Shares of online car-shopping service TrueCar (NASDAQ:TRUE) were rising at mid-day on Monday despite a dramatic market sell-off, after the company disclosed in an SEC filing that its new CEO recently bought 100,000 shares.
As of 12:15 p.m. EDT, TrueCar's shares were up about 7% from Friday's closing price.
In a bold gesture of confidence in TrueCar's prospects, new CEO Mike Darrow bought 100,000 shares of the company last week, paying an average price of $2.3257 per share, according to an SEC filing made by TrueCar late on Friday.
It's a strong statement, for reasons that go beyond the current coronavirus fears. TrueCar's shares were rocked in February after news that a longtime partner -- a bank that referred about 29% of TrueCar's customers last year -- was ending its relationship with the company.
At the time, Darrow said that he was confident that the company would be able to more than make up the business through new partnerships and market opportunities -- but investors were skeptical. By increasing his "skin in the game," Darrow is telling investors that he's confident in the company's direction.
There are good reasons to be worried about TrueCar at the moment, given that measures to contain the spread of the COVID-19 virus could effectively shut down auto sales in the U.S. for the next several weeks if not longer.
But Darrow's decision to buy 100,000 shares in the market, bringing his total holdings in the company to almost 800,000 shares, should give investors at least a little bit of reassurance about the company's longer-term prospects.