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I can’t speak for everyone, but these days I’ve been keeping my transportation to a minimum. 

My wife, three boys, and I have all stayed fairly put at home during quarantine, leaving only for groceries and small errands. 

I’m sure it’s been like that for most of us across the country. 

Airlines are really struggling with all the travel restrictions. 

While I’m not as tough on them as Warren Buffet right now, I’d venture to guess that at least one major provider will go out of business in the near future.  

IPOs like Uber and Lyft were hit especially hard by the selloff. And despite their stocks rallying back somewhat with the overall market, countless drivers have found themselves out of work. 

Uber and Lyft drivers anticipate a tough road ahead as many people are questioning what the future of ride sharing will look like. 

Some streets in major cities, once filled with bumper to bumper traffic, now go minutes without a single car passing by. 

Given all these circumstances, I find it especially interesting that one online used car dealer just filed for an IPO. 

So let’s take a look at what’s under the hood of this company, and see whether the owners and underwriters are actually shiesty bastards conspiring to rob you of your trading profits. 

 

Shop For Your Car Online and Get It Delivered with VROOM (VRM)

 

I hinted that I was suspicious about a car dealer going public in a time when drivers are logging far less miles, but I have to be honest about something…

The fact that the company allows people to purchase their car strictly online and have it delivered straight to their house, could actually position it right now better than otherwise. 

According to a recent survey conducted, consumers have a strong preference for transacting online over offline. 

I mean, who wants to go to CarMax right now and try a seat in ten cars that have been touched and handled by dozens of other people?

The Vroom website is even advertising “contact-free” delivery on their website. It means that you can acquire the keys and sign the paperwork at a safe social distance as soon as the delivery driver arrives. 

You can sell and trade your car contact free as well. Following an easy appraisal process, Vroom will send you an offer and schedule a free vehicle pickup. 

And I love this part even better. Since Vroom can’t offer a typical brick and mortar test drive, they offer something more valuable.  You can try out your car and see how the kids fit for the first 7 days (or 250 miles), before deciding whether you want to return it for a full refund. 

To me, Vroom is like the Amazon of car dealerships. Their delivery process looks on point, and they have physical locations based out of New York, Houston, and Detroit.

 

Aside From Furloughing One-Third Its Staff, Vroom’s Numbers Are Improving

 

Vroom reported in its filing net first-quarter losses of $27.1 million, which was less than the $41.1 million from the first quarter of 2019. 

On the flipside, Vroom’s revenue increased from $235.1 million a year ago to $375.8 million.

The primary source of revenue, $308.7 million in the first quarter, came from retail car sales. 

Revenue in 2019 amounted to $1.19 billion compared to $855.4 million in 2018.

The company also does have some cash on hold at the moment, which is good. In total, they have $156.4 million in cash and cash equivalents.

While the IPO is still a little ways out, Vroom anticipates listing under the ticker symbol VRM and raising $100 million. 

The underwriters for this IPO are Goldman Sachs, BofA Securities, and Allen & Company. 

Whether or not I decide to trade VRM, either long or short, my premium IPO Payday subscribers will immediately find out. 

If you’re not a subscriber and would like to learn how I’m potentially trading VRM or countless other exciting IPOs, you can consider joining here. 

 

Author: Ben Sturgill

Ben leads two services at RagingBull. IPO Payday can help you pinpoint, position, and profit from IPOs. In Daily Profit Machine Ben guides day and swing traders to profit by trading the SPY Index. Ben hosts the RagingBull.com weekly podcast WealthWise where he shares thoughts on wealth and success with traders, businesspeople, entrepreneurs, and experts to uncover and share the wisdom needed to live a wealthy life.

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