TrueCar Makes Darrow Permanent CEO, Analysts See Signs of Stability

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.

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.

Cadence

Netflix's New Culture Memo Addresses Censorship and Corporate Secrecy

Kristin Snyder

Kristin Snyder is an editorial intern for dot.la. She previously interned with Tiger Oak Media and led the arts section for UCLA's Daily Bruin.

Netflix's New Culture Memo Addresses Censorship and Corporate Secrecy
Photo by Venti Views on Unsplash

Netflix promised change after its poor first-quarter earnings. One of the first targets: the Netflix Culture document.

The changes, which Variety reported on Thursday, indicate a new focus on fiscal responsibility and concern about censorship. While promises to support honest feedback and open decision-making remain, the memo’s first update in almost five years reveals that the days of lax spending are over. The newly added “artistic expression” section emphasizes Netflix’s refusal to censor its work and implores employees to support the platform’s content.

Read more Show less

‘Raises’: Mahmee Secures $9.2M, Wave Financial Launches $60M Fund

Decerry Donato

Decerry Donato is dot.LA's Editorial Fellow. Prior to that, she was an editorial intern at the company. Decerry received her bachelor's degree in literary journalism from the University of California, Irvine. She continues to write stories to inform the community about issues or events that take place in the L.A. area. On the weekends, she can be found hiking in the Angeles National forest or sifting through racks at your local thrift store.

Raises
Image by Joshua Letona
In this week’s edition of “Raises”: It was another slow week on the deal front, but one maternal health startup, with a mission to fight maternal mortality, landed a deal with growth equity business Goldman Sachs. Meanwhile, a Los Angeles-based investment firm is launching its 8th digital asset fund of $60 million.
Read more Show less
RELATEDEDITOR'S PICKS
LA TECH JOBS
interchangeLA
Trending