TrueCar Makes Darrow Permanent CEO, Analysts See Signs of Stability

TrueCar Makes Darrow Permanent CEO, Analysts See Signs of Stability

TrueCar announced Tuesday that Mike Darrow, who has been the Santa Monica company's interim chief executive, now will take over the position on a permanent basis. Analysts say the move adds a measure of stability at a time when many on Wall Street saw it as a possible acquisition target.

Darrow has been with TrueCar for three years, and was put into the top leadership position after former president and CEO Chip Perry retired in May 2019. Prior to that, Darrow served as the company's executive vice president as well as head of TrueCar's ALG subsidiary.


The move adds a dose of support for a company that just a few weeks ago was rumored to be on the auction block after a disappointing earnings report. The stock has bounced around in recent days amidst the wider market volatility, dropping from about $3.66 in earlier February to Tuesday's closing price at $2.34.

"We believe this adds stability to the organization," said Andrew Boone, an analyst with JMP Securities, in a research note. He kept the company's stock rating at a "market perform."

A research note by financial services firm BTIG speculated recently that TrueCar, which operates the nation's fourth largest online automotive marketplace, was ripe for an acquisition as soon as the end of this month. "Based on our inbound call volume, we believe many investors are wondering if True is now an acquisition target," wrote analyst Marvin Fong.

TrueCar has been on a wild ride since serial entrepreneur Scott Painter founded the company in 2004.

It quickly became one of L.A.'s hottest startups after it appeared to be able to disrupt the half-century-plus relationship between consumers and auto dealerships. But dealerships were not about to go quietly, and in 2012, thousands of dealers exited the TrueCar network amidst complaints about bidding wars that meant they were losing money on transactions.

Still, the company went public two years later and shares have sunk from a high of $25.00.

In 2018, changes to Google's search algorithm caused a steep decline in TrueCar's website traffic. Just as the company was recovering from that and improving its SEO, USAA recently announced it would end its lucrative partnership, which brought in 29% of TrueCar's unit sales, in October.

USAA remains TrueCar's fourth-largest shareholder with about 9 million shares, which represents 8.5% of the stock.

Darrow said in a statement Tuesday that he's "proud of the way the company united to launch our new brand and consumer experience earlier this year, which was no small feat."

"I look forward to working with the team as we continue to innovate and deliver a modern and world-class car buying experience that appeals to consumers and dealers alike," he added.

https://twitter.com/thebenbergman
ben@dot.la

Subscribe to our newsletter to catch every headline.

The Santa Monica-based movie-ticketing service Atom Tickets has pre-sold more tickets for "Godzilla vs. Kong" than any film since the start of lockdown.

Following a disastrous year for the box office, its performance could be a litmus test for Hollywood and the many theaters that teetered on the brink during the pandemic.

Read more Show less
Sam Blake

Sam primarily covers entertainment and media for dot.LA. Previously he was Marjorie Deane Fellow at The Economist, where he wrote for the business and finance sections of the print edition. He has also worked at the XPRIZE Foundation, U.S. Government Accountability Office, KCRW, and MLB Advanced Media (now Disney Streaming Services). He holds an MBA from UCLA Anderson, an MPP from UCLA Luskin and a BA in History from University of Michigan. Email him at samblake@dot.LA and find him on Twitter @hisamblake

https://twitter.com/hisamblake
samblake@dot.la

Despite — or in many cases because of — the raging pandemic, 2020 was a great year for many tech startups. It turned out to be an ideal time to be in the video game business, developing a streaming ecommerce platform for Gen Z, or helping restaurants with their online ordering.

But which companies in Southern California had the best year? That is highly subjective of course. But in an attempt to highlight who's hot, we asked dozens of the region's top VCs to weigh in.

We wanted to know what companies they wish they would have invested in if they could go back and do it all over again.

Read more Show less
Ben Bergman

Ben Bergman is the newsroom's senior finance reporter. Previously he was a senior business reporter and host at KPCC, a senior producer at Gimlet Media, a producer at NPR's Morning Edition, and produced two investigative documentaries for KCET. He has been a frequent on-air contributor to business coverage on NPR and Marketplace and has written for The New York Times and Columbia Journalism Review. Ben was a 2017-2018 Knight-Bagehot Fellow in Economic and Business Journalism at Columbia Business School. In his free time, he enjoys skiing, playing poker, and cheering on The Seattle Seahawks.

https://twitter.com/thebenbergman
ben@dot.la
RELATEDTRENDING