Fox Business Briefs: New York Post reports that Hertz has been delayed in paying a major bill, hoping to put it off until after the company improves; AAA is not issuing its annual Memorial Day travel forecast for the first time in 20 years.
Hertz Global Holdings Inc. raised $ 29 million on the sale of its likely worthless stock before regulators discouraged the bankrupt rental car company from selling more.
The Florida-based company, which filed for Chapter 11 protection in May, on Monday revealed the results of a controversial attempt to sell as much as $ 500 million in shares despite the harsh financial penalties that drove the company into bankruptcy.
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Hertz launched the stock sale after its filing for bankruptcy, hoping to capitalize on a speculative frenzy fueled by risk-hungry day traders that gave the company a golden opportunity to raise capital needed to cover its accounts. .
Bankruptcies typically wipe out shareholders, and Hertz warned in June its bankruptcy “could render our common stock worthless.” However, the shares went to a gravity-defying rally following his filing for bankruptcy as investors in Robinhood’s popular apartment stepped in.
| Ticker | Security | Last | Change | Change% |
|---|---|---|---|---|
| HTZ | HERTZ GLOBAL HLDGS | 1.69 | +0.18 | + 11.92% |
Hertz halted share sales after the Securities and Exchange Commission asked questions, but not before issuing 13.9 million shares, $ 29 million net, according to a security filing filed by the company on Monday.
The stock closed at $ 1.69 on Monday, implying a market capitalization of $ 240 million.
HERTZ DOLED OUT $ 16M IN BONUSES TO TOP EXECUTIVE DAYS FOR BANKRUPTCY FILING
Hertz said Monday that while it could not predict what would happen to its shares during the bankruptcy, its value would likely be removed unless its debt could be repaid in full. For that to happen would require “a significant and rapid and currently unannounced improvement in business conditions” to pre-coronavirus levels, Hertz said.
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The company went into bankruptcy with roughly $ 19 billion in debt and hundreds of thousands of oversized cars sitting in seats as Americans travel less because of the Covid-19 pandemic.
Hertz also said it has been on the hunt for emergency loans to keep its operations running. The company said it had $ 1.4 billion in cash at the end of June, enough to fund operations through December.
The Wall Street Journal reported in June, after the stock sale was halted, that Hertz was on the hunt for a financing package.
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