Cars.com shares plunged for a second straight day on Tuesday after the online auto marketplace announced it had failed to find a buyer after a 10-month search.

An “exhaustive strategic review process” included meetings with 29 prospective bidders but according to Cars.com Chairman Scott Forbes, “did not yield actionable options for a sale of the company.”

“As a result … 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,” he said Monday in a news release.

After dipping as much as 40% on Monday — erasing more than a third of the company’s market value — Cars.com shares fell 12% on Tuesday to close at $10.40.

The company also reported disappointing second-quarter results and warned that revenue would fall more than expected this year. Gary Prestopino, managing director at Barrington Research Associates, said Monday’s selloff was likely also fueled by a lack of news about share buybacks.

“It’s all come together and the stock’s gotten killed,” he told The Wall Street Journal.

Cars.com, which competes in the automobile advertising space with CarGurus.com and TrueCar, has been hit by sluggish new-car sales and lower-priced competitors. After receiving unsolicited bids from potential buyers last summer, it hired JPMorgan in September 2018 to conduct a strategic review.

The board signed off on a sale in May but the buyer ultimately “informed the company that it was no longer prepared to move forward with the transaction within the company’s timeframe,” Cars.com said.

For the second quarter, Cars.com posted a loss of 9 cents a share, compared with earnings of 18 cents a share during the prior-year period. On an adjusted basis, the company had earnings of 30 cents a share, missing analysts’ estimates of 43 cents per share.

Prestopino said management has been making progress, citing increases in visitor numbers and site visits. In the latest quarter, average monthly unique visitors rose 13% year-over-year to 21.6 million and traffic visits were up 16%.

Photo by Jamie Sabau/NHLI via Getty Images

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