CarGurus ($CARG) To Raise $132 Million In IPO

CarGurus

CarGurus stock is set to debut on October 12, under the ticker symbol $CARG, for an initial public offering that would value the company at roughly $1.6 billion. The company is planning to sell 9.4 million shares of stock between the $13-$15 projected price range.

The IPO will help the company to raise roughly $132 million in funding. Goldman Sachs is helping to lead the IPO, with the help of JMP Securities, RBH Capital Markets, William Blair, Raymond James, and Allen & Company. The company was founded in 2005 by Langley Steinert, who was also the co-founder of TripAdvisor, and it is now one of the largest online marketplaces for new and used vehicles.

CarGurus has over 5.4 million listings of new and used vehicles on its website, and according to comScore, they are the nation’s most-visited online automobile marketplace. Much of the userbase takes advantage of the service through their mobile app, which has helped CarGurus to establish a tight grip on the auto marketplace. CarGurus generated $143 million in revenue in the first half of 2017, which is a 70% year-over-year increase. Their net income on $143 million of revenue was $8.6 million.

Hot Tech IPOs 2017

Technology companies, including $ROKU and $SNAP, have had some of the most spectacular IPO’s this year. $ROKU began trading on the public market on 9/28/17 in stellar fashion. Although its IPO was originally priced for $14 per share, the stock opened for trade at $15.78 on heavy demand. By the second day of trading, it had managed to hit a high price of $29.80, which represented an astounding gain of 112% from its IPO price of $14!

$SNAP staged a similarly impressive rally on it’s first trading day, and managed to surge from the $24 opening price to a high of $29.44 on its second trading day, before significantly giving back all its gains in the following days.

The best indication of a strong IPO stock is an open above the indicated price range. We will be closely watching the price at which CarGurus open, as an opening print above the $15 price will indicate strong demand for the stock. As another technology company, is CarGurus set to continue the trend and have a strong IPO day? Join us live in the Warrior Trading chat room on 10/12 to find out as we watch the IPO for a trade setup!