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Why TrueCar's Stock Was Up Today

By John Rosevear - Apr 29, 2020 at 4:34PM

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Socially-distant car shopping? TrueCar can help.

What happened

Shares of online car-shopping platform TrueCar (TRUE -6.10%) closed up on Wednesday, as investors gravitated to the stock while pondering the need for tools that could facilitate car-shopping while practicing social distancing.

TrueCar's shares closed at $2.56 on Wednesday, up about 12.8% on the day. 

So what

Here's what probably drove the stock higher today: TrueCar makes it a lot easier to shop for a new car without going to a dealership, and that is starting to seem like something that could become quite popular in the weeks and months to come. 

The entrance to TrueCar's corporate offices in Santa Monica, California.

Image source: TrueCar.

TrueCar's online platform is designed to simplify new-car shopping. It allows the user to get a guaranteed price from a local dealer and to complete much of the sales transaction online.

As the U.S. looks toward reopening its economy while concerns about the COVID-19 virus persist, tools that facilitate no-human-contact commerce will likely become very popular. That's likely to be good news for TrueCar, which works with new-car dealers around the country to set up agreed-price transactions, and collects a fee (typically a few hundred dollars) from each sale.

Now what

Investors looking forward to hearing from TrueCar's senior management team won't have to wait long. The company is scheduled to report its first-quarter earnings results after the market closes on Thursday, May 7. 

John Rosevear has no position in any of the stocks mentioned. The Motley Fool recommends TrueCar. The Motley Fool has a disclosure policy.

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