KAR Auction Service - IPO for Debt is Lousy Investment

An IPO that is needed to mostly pay down debt makes for a poor investment.

Last year KAR had a net loss of $169.9 million, with most profits made by cutting costs and expenses. Sales were also down over 3%.

Many of the used-car dealers that supported KAR have disappeared. Additionally, KARS flooring arm, Automotive Finance Corporation (AFC), has sued hundreds, if not thousands, of the used car dealers that had supported them.

That all adds up to a disintegrating business plan and a rotten investment.