Hertz suspends sale of 'worthless' stock amid SEC scrutiny

Hertz allowed to sell $1 bn in shares despite bankruptcy

The stock, whose trading had been halted earlier in the day, ended the regular trading session up 5 cents at $2, while ilts bonds tumbled.

The shares were suspended on Wednesday a few hours after the United States Securities and Exchange Commission (SEC) voiced doubts about its $ 500 million share sale plan.

Funding a company's bankruptcy has always been a safe and lucrative business for Wall Street banks and asset managers, earning them high fees and interest rates with minimal risk.

Because to amateur investors with nothing else to do, bankruptcy = opportunity.

Although retail investors have soundly picked up on the risks associated with a share dilution- and as a result went on a Hertz panic-buying frenzy, they are still ignoring the very basic fundamentals- like the fact that the bankrupt stock is still worthless. The company's stock fell 10% to $ 1.8 a share before the sale was canceled. Hertz had said stockholders wouldn't get anything from its bankruptcy plan unless those with more senior claims, including bondholders, are paid in full.

Analysts have remarked how unusual it was for a company ensnared in bankruptcy proceedings to propose such a large sale of common shares - holders of which are usually last in line when the bankruptcy court hands out company assets.

United Kingdom government abandons NHS contact tracing app
Fried argues that freedom from Apple's restrictive payment practices equates to a better customer experience. They have been trying to launch the Facebook Gaming app on the App Store with no success since February.

A series of strategic missteps, competition from ride-hailing giants including Uber Technologies Inc. and Lyft Inc., and a revolving door of chief executives left Hertz a step behind its competitors for the better part of a decade.

How to know whether a stock can wipe you out?

"With the severity of the COVID-19 impact on our business, and the uncertainty of when travel and the economy will rebound, we need to take further steps to weather a potentially prolonged recovery", Hertz President and CEO Paul Stone said in a news release following the announcement.

Hertz now needs cash, among other things to pay the army of lawyers and bankers advising the company on its bankruptcy case.

Still, why would anyone buy stock in a bankrupt firm? "Please don't make the expensive mistake of thinking there aren't no more Hertzes out there".

-Matt Wirz contributed to this article.

Related News:



Most liked

Apple on course for iPhone 12 launch in late September
A new video shows how a dummy unit of the iPhone 12 compares against the iPhone SE , and the smaller bezels make a big difference. Additionally, at least one Apple component supplier in China has already been asked to ship components to Wistron in July.

New Pokemon Snap Unveiled
Several announcements were recently featured in the recent Pokemon Presents stream today and it just ended with an announcement. The Pokemon Company is hard at work to bring fans more ways they can interact with their favorite little monsters, Pokemon .

Nick Cordero lost 65 pounds while battling the coronavirus: wife
There's not much going on, but he's there. "And he answers yes and no questions, a yes is looking up a no is looking down". It's monotonous, and it is hard on a daily basis - very, very hard for me and, I'm sure, even more so for Nick .

Arsenal's Emi Martinez ready to seize chance after 'devastating' Bernd Leno injury
Arsenal's players were accused of arrogance as their season continued to unravel with a last-gasp 2-1 defeat by Brighton . Arsenal's players reacted angrily at the French forward who hit back at suggestions he was reckless.

Napoli defeat Juventus on penalties to win Coppa Italia
Paulo Dybala who had chances to score in the first half and Danilo both missed their penalties for Juventus in the tough battle. Atalanta occupy the final Champions League berth, three points ahead of Roma , with Napoli sixth a further six points back.

Nick Watney tests positive for coronavirus, withdraws from RBC Heritage
The RBC Heritage is taking place without spectators as the PGA Tour cautiously returns from a March shut down. The third round of the PGA Tour's Hilton Head golf tournament started Saturday with some sense of relief.

Delhi's Health Minister admitted after fever, breathlessness; COVID-19 results awaited
In a bid to provide relief to common man, the central government has chose to fix the prices of coronavirus treatment in Delhi. The number of Covid-19 cases in Delhi is the third highest in the country after Maharashtra and Tamil Nadu.

Trump threatens to cut ties with China after 'tense' talks
There is "still a long way to go", Lighthizer said, and there remain "very fundamental issues we have to come to grips with". Trump has also ramped up his rhetoric against Beijing as the coronavirus pandemic continues to spread in the U.S.

UEFA confirm eight-team knockout tournament for Champions League
The Women's Champions League final eight will be held from August 21-30 in Spain, with Bilbao and San Sebastian the host cities. Paris Saint-Germain, Atalanta, Atletico Madrid and RB Leipzig have already qualified for the Champions League quarter-finals.

Marches, Parades, Mark Juneteenth in LA; Garcetti Supports Federal Holiday
June 19 has since been regarded as a "day of Jubilee" and a day of independence for Black people in the United States. Juneteenth is a state holiday in Texas. "Juneteenth is the oldest celebration of the end of slavery in the US".

No more home quarantine for covid-19 patients in Delhi
To increase testing capacity & quick delivery of results in Delhi, testing via Rapid Antigen testing methodology was also started yesterday.

Brighton & Hove Albion vs. Arsenal - Football Match Report
But after two losses in their two games since returning to action, Arsenal are now without one of their best players in Leno . Both Alexandre Lacazette and Pieree Emerick Aubameyang have caused Maty Ryan to have to be alert.

Coronavirus was in Italy already in December, sewage study shows
The new ISS study "may contribute to shedding light on the first phase of the virus's circulation in Italy ", La Rosa said. Nine other towns in Lombardy and neighbouring Veneto followed and the entire country went into lockdown in early March.

Australia sees China as main suspect in state-based cyberattacks, says report
The cyber attacks also used "spearfishing" techniques, sending e-mails with malicious files, links and Office 365 prompts. Experts say attribution is often hard , time-consuming and, if made public, could escalate tensions further.

China denies seizing Indian troops
China brought in pieces of machinery, cut a trail into a Himalayan mountainside and may have even dammed a river. So far, no official statement has been issued by the army or the government on the release of the soldiers.