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The Surprising Reason Why TrueCar Stock Is Up Today

By John Rosevear – Jul 30, 2020 at 2:11PM

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Ready for a plot twist?

What happened

Shares of online car-shopping service TrueCar (TRUE 0.66%) were sharply higher on Thursday afternoon. There was no news, and the company won't report earnings until next week, but Twitter chatter suggested that investors' sudden interest in TrueCar's shares might be a case of mistaken identity.

As of 1:45 p.m. EDT, TrueCar's shares were up about 14.2% from Wednesday's closing price. 

So what

As many auto investors know, TrueCar's shares have been known to move up or down sharply after earnings, depending on how the quarter went. But a rally on no obvious news is not something we see with this stock, typically.

A little digging turned up a plot twist: There's a lot of Twitter discussion around a company called TrueChain, and many of the related tweets include TrueCar's ticker (TRUE). 

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

If you're looking for a blockchain platform, you're at the wrong address. Image source: TrueCar.

TrueChain, based in Singapore, is a privately held blockchain platform. That is the kind of company that could see big up and down moves on small news, if it were public.

My guess is that investors (or traders, or speculators, or whoever) are snapping up TrueCar's shares because of the ticker -- and without, shall we say, adequate due diligence. 

What's it mean for actual TrueCar investors? Unless some actual news comes out, don't expect this rally to last very long. 

Now what

TrueCar -- the car-shopping service, not the blockchain platform -- will report its second-quarter earnings on Aug. 6. Wall Street analysts polled by Thomson Reuters currently expect a loss of $0.07 per share, versus a loss of $0.02 per share in the second quarter of 2019, on lower revenue due to sharply lower U.S. auto sales in the quarter. 

As for TrueChain? You'll have to research that one yourself.

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

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Stocks Mentioned

TrueCar, Inc. Stock Quote
TrueCar, Inc.
$1.52 (0.66%) $0.01
Twitter, Inc. Stock Quote
Twitter, Inc.
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