had two pieces of bad news Monday. Its quarterly results are even worse than expected and its months-long search for a strategic investor has failed to garner any acceptable bids.

As a result, the CARS stock price tumbled Monday morning — 34% from its Friday close.

The investor search has been ongoing since last fall but was only made public in January. It turned up “29 interested, prospective bidders,” according to a statement. But the quest turned up zero “actionable options for a sale of the company.”

Second-quarter results disappointed on several points. Revenue was $148.2 million U.S. — a decrease of $20.3 million or 12%, year-over-year. The company’s net loss of $6 million compares to a net profit of $12.7 million during the same time last year. It doesn’t look like the situation will improve in the near future. Management adjusted its revenue forecast for 2019 downward to a 6 to 9% drop from 2018’s $662.1 million.

Cars CEO Alex Vetter blamed a loss of dealer clients for the disappointing results. Dealer client numbers dipped from 19,300 at the end of March to 18,891 at the end of June. He also cited diminished ad sales to car manufacturers.

The earnings report would seem to vindicate the 29 erstwhile bidders to keep clear of

The company’s search for investors began after the summer of 2018 when it had “received unsolicited calls from a number of parties interested in potentially acquiring the company,” according to the Cars statement. None of the bidders are named.

Activist shareholder Starboard Value — disappointed with the company’s stagnant earnings — successfully pressed for an active search for a buyer. Starboard negotiated two positions for itself on’s board to help oversee the search.’s statement describes a rigorous process that went through three stages and involved a number of strategic and financial bidders. In the end, the board decided it was best to try to execute its own strategy rather than going with any of the offers.

“The process did not yield actionable options for a sale of the company,” the statement continues. “As a result, and after consultation with our financial and legal advisors, the board has concluded that the best interests of shareholders are served by continuing to focus on our strategic plan and opportunities to drive growth and shareholder returns as an independent public company. We remain open to all potential value-creating opportunities.”

Read more on the’s second-quarter earnings here.

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