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11% Pop in TrueCar, Inc's Shares Provides a Little Relief, but Its Dealer Pledge Remains Key

By Daniel Miller - Apr 14, 2016 at 8:30AM

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Despite Wednesday's 11% rise, TrueCar has still had a bumpy ride over the past year and will face a challenging remainder of 2016.


Focus on TrueCar's Dealer Pledge rather than short-term volatility. Image source: TrueCar's Dealer Pledge presentation.

What: Shares of TrueCar (TRUE -0.32%), a Santa Monica based automotive information website that plays the role of middle man between consumers and dealerships, closed 11% higher Wednesday.

So what: It's a one-day move that provided a little relief for investors who have witnessed the stock shed 36% of its value, including Wednesday's 11% gain, during 2016, and an even greater 62% decline over the past 12 months. 

While it's possible news driving the move will become apparent down the line, there doesn't appear to be any direct news pushing TrueCar's stock price higher on a day its shares traded at about 67% of its average volume for the past three months. For now, we'll chalk this move up to "stocks go up and stocks go down," and with a market cap of just over $500 million, TrueCar's journey promises to be a volatile one during the near term.

Now what: Going forward, there are many factors TrueCar investors can keep an eye on. Of course, new vehicle sales in the U.S. continuing to stay at strong levels would be desirable, but this serves as a good opportunity to remind investors that the relationship between TrueCar and its network of dealerships is the most important ongoing development. I still strongly recommend reading through the company's recent "Dealer Pledge" to better understand how the company plans to offer more value to consumers and dealerships alike -- or check out this brief summary -- a pretty critical component to being a middle man.

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