What's driving carsales.com?

Despite the market’s exuberant response to the purchase of a South Korean start-up, carsales failed to release sufficient detail about the new business.

Last week’s share price rise of carsales.com Limited (ASX:CRZ) lifted its market value by about $300 million in just a few days. This price rise followed a rather sparsely worded ASX announcement that outlined a $126 million investment by the company. The investment was into a newly formed online car sales business in South Korea that is presented as the current market leader in that country.

Whilst the investment by CRZ may be exciting, its description in the ASX release was poor and shortly I will explain why I think this is so.

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