Online auto broker CarGurus (CARG) turned in a hot initial public offering that priced above its estimated range and soared 81% at the start of trading Thursday.
The IPO raised $150 million and set the stage for an expansion of its web-based marketplace for buyers and sellers of new and used cars.
CarGurus, late Wednesday, priced 9.4 million shares at 16, above the estimated range of 13 to 15. Shares began trading at 29 for an 81% gain on the stock market today, under the ticker CARG, and closed the trading session at 27.58, for a 72.4% jump.
CarGurus was founded by Chief Executive Langley Steinert, who also was a co-founder of TripAdvisor (TRIP).
The company’s online automotive marketplace connects buyers and sellers of new and used cars using proprietary technology, search algorithms and data analytics, the company says.
IPO research firm IPOboutique.com said the CarGurus IPO was multiple times oversubscribed.
IBD’S TAKE: The biggest stock market winners typically make their major price moves within a few months or years of their initial public offering. Learn more at IBD’s IPO page. IBD also focuses on the best-performing IPOs of the past three years in its IPO Leaders column.
As of June 30, CarGurus had an active dealer network of more than 40,000 dealers, and more than 5.4 million car listings, the company said in its IPO prospectus. In addition to the U.S. market, the company operates online marketplaces in Canada, the United Kingdom, and Germany.
For the six months ended June 30, CarGurus reported revenue of $143.2 million, up 70% from the year-ago period, with a profit of $8.5 million, or 8 cents per share, on an adjusted basis.
“Our mission to build the world’s most trusted and transparent online automotive marketplace continues, and we’re excited to enter this new chapter,” said Steinert in a prepared remark.
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