Please ensure Javascript is enabled for purposes of website accessibility

Why TrueCar Stock Closed Lower Today

By John Rosevear - Jun 24, 2020 at 6:20PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Investors aren't happy about the COVID-19 resurgence.

What happened

Shares of online car shopping service TrueCar (TRUE -1.72%) closed lower on Wednesday, amid a broad market decline on investor fears that a surge in coronavirus cases could lead to renewed shutdowns in parts of the United States.

TrueCar's shares ended the session at $2.68, down 7.9% from Tuesday's closing price. 

So what

Many stocks sold off on Wednesday amid reports that new COVID-19 cases are increasing quickly in states that had reopened their economies, including Texas, Arizona, and Florida. The broad concern is obvious: increasing cases could lead to renewed restrictions on businesses and individuals. That would be bearish for a long list of stocks, and the S&P 500 Index and NASDAQ Composite Index both closed down more than 2%.

TrueCar's corporate headquarters in Santa Monica, California.

Image source: TrueCar.

It takes a bit of a leap to see why that might be bearish for TrueCar, however. TrueCar provides an online platform for car shoppers to choose the vehicle and options they want. Shoppers can then proceed to buy a matching vehicle at a fixed (and usually somewhat discounted) price from one of the company's dealer partners. 

Now what

It's hard to say where things go from here. On the one hand, TrueCar is a company that could stand to benefit if shelter-at-home orders are revived for an extended period; on the other, auto sales -- and TrueCar's business -- will suffer if the current economic recession is protracted.

It's clear which way consumer-discretionary investors were betting on Wednesday.

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

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

TrueCar, Inc. Stock Quote
TrueCar, Inc.
TRUE
$2.56 (-1.72%) $0.04

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
400%
 
S&P 500 Returns
128%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/15/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.