Focus on TrueCar's Dealer Pledge rather than short-term volatility. Image source: TrueCar's Dealer Pledge presentation.
What: Shares of TrueCar, a Santa Monica based automotive information website that plays the role of middle man between consumers and dealerships, closed 11% higher Wednesday.
Continue Reading Below
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.
The article 11% Pop in TrueCar, Inc's Shares Provides a Little Relief, but Its Dealer Pledge Remains Key originally appeared on Fool.com.
Daniel Miller owns shares of TrueCar. The Motley Fool recommends TrueCar. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright 1995 - 2016 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.