TrueCar Surprises With Upside Despite Poor IPO Pricing

The online new car sales network sold 7.8 million shares, and at the IPO price the company had a market cap of $747 million and an enterprise value of $648 million.

At the IPO price, net proceeds to TrueCar will be around $71.1 million, if the underwriters of the offering exercise their option on 1.17 million additional shares. Joint managers for the offering are Goldman Sachs, J.P. Morgan and RBC Capital Markets.

TrueCar clams a network of more than 7,700 certified dealers, and the company estimated that its platform accounted for 3.2% of all new car purchases in the United States during the first quarter of this year. Its largest customer is insurance company USAA, which accounts for about 43% of its business. USAA also owns a stake of about 26% in the company.

Shares traded at $10.43 midway through the noon hour, and about 4.5 million shares had already changed hand.

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