Hertz shares skyrocket after Jefferies says CarMax, AutoNation may ‘plummet’

Hertz Global Holdings Inc. HTZ Shares,
+ 62.90%
They shot up 20% in active trading on Wednesday, leading them to break a 4-day streak in which they lost 38%, after Jefferies analyst Hamzah Mazari said his checks suggest that CarMax Inc. KMX,
and AutoNation Inc. AN,
You might be interested in the bankrupt car rental company. The trading volume was 18.8 million shares, making the shares more actively traded on the New York Stock Exchange. Meanwhile, CarMax shares gained 0.3% while AutoNation shares fell 2.3%. Mazari said the most obvious way for CarMax and AutoNation car dealers to “dive in” would be to bid on 150,000 of Hertz’s used cars, which are likely to be sold to pay lenders, but also as Hertz seeks to reduce its fleet given the current demand and need to shore up cash. He believes that a sale of 150,000 used cars could raise $ 3 billion. Separately, Mazari said he believes Hertz’s $ 1 billion in liquidity as of March 31 will have decreased to approximately $ 365 million by June 30, meaning the company needs financing from the debtor in possession of al minus $ 900 million. “We think that for longer [Hertz] leverage to re-emerge from bankruptcy with a cleaner capital structure, the more opportunities there are for rivals to pick up stocks, “Mazari wrote in a note to clients. Rival Avis Budget Group Inc.’s stock CAR,
fell 4.5% in the morning trade.