- Hertz Global Holdings Inc's shares are falling by around 20%.
- New shares "could be worthless," said the bankrupt firm.
- Concerns about a second coronavirus wave are compounding the losses.
For those that did not understand the meaning of "bankrupt" Hertz Global Holdings Inc – the firm behind the well-known car-renting brand – made it clear.
The firm issued $500 in new shares but added a stark warning, saying the paper could be worthless. The reaction was swift, and NYSE: HTZ is trading at around $2.26, down some 20% on the day and nearly 90% from the high above $20 recorded just before the pandemic gripped the world.
Hertz Stock News
Coronavirus has hit the firm hard and triggered its Chapter 11 filing. It may now add misery to the stock price. Investors are concerned about a second coronavirus wave and selling shares. Cases in Florida, California, and Texas are on the rise. Hopes that warm weather would kill COVID-19 have been put aside as steaming hot Arizona is also seeing a leap in hospitalizations.
Can Hertz eventually find bargain-seekers? Building confidence in a bankrupt firm was already hard, and halving the amount of share offered the public is not a confidence builder. The spike came amid an announcement of selling up to $1 billion worth of bonds. When the sum was reduced to half of that – the share tumbled as well.
At some point – perhaps at the 52-week low of $0.40 – Hertz would prove an opportunity for those willing to take the risk. The moment has yet to come.
The Florida-based company was founded in 1918 when what is known now as Spanish influenza began ravaging around the war-torn world. Bankruptcy at a time of another pandemic seems poetic, but Hertz may still survive. Time will tell.
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