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Shares of Hertz Global Holdings (HTZ - Free Report) declined 11.5% to $1.16 in after-hours trading yesterday. This double-digit fall was caused by the news that billionaire investor Carl Icahn sold his stake in the company.
Per a regulatory filing, Carl Icahn sold his entire 55.3 million shares or 39% interest for 72 cents per share. Icahn, who was the company’s primary stakeholder, decided to divest his owned portion for a significant loss following Hertz Global’s decision to file for bankruptcy protection on May 22. Notably, Icahn has been a stakeholder at Hertz since 2014.
Naturally, the exit of such a high-profile investor is a huge setback for the company, which competes with the likes of the Zacks Rank #3 (Hold) player Avis Budget Group (CAR - Free Report) in the car rental space. The stock has already shed 91.7% of value so far this year compared with Its industry’s merely 8.3% decline.
Notably, Hertz’s business suffered massive damages due to the coronavirus pandemic with demand for car rental services vanishing as most people are staying indoors on account of lockdown and social distancing. Its high debt levels are a further concern with its revenue stream being badly hit. Notably, the company ended the March quarter with cash and cash equivalents worth $1,409 million whereas its total debt amounted to a staggering $20,598 million. The total debt to total capital ratio for Hertz increased to 0.93 at the end of first-quarter 2020 compared with 0.91 at the end of the fourth quarter of 2019.
Further intensifying its woes was the persistent management uncertainty that induced frequent shifts in the top brass over the past few years. The most recent change came on May 18 when Paul Stone replaced Kathryn Marinello as the company CEO.
Due to the above-mentioned headwinds, the company filed for insolvency safety. The bankruptcy filing, however, does not include Hertz’s operations in Europe, Australia and New Zealand as well as its franchised locations in the United States.
Notably, the company, which currently carries a Zacks Rank #4 (Sell), is not the only entity to have petitioned for liquidation in these coronavirus-ravaged times. Other companies including the Zacks #3 Ranked Latin American carrier LATAM Airlines and oil producer Whiting Petroleum , also carrying the same Zacks Rank, have also done the same thing
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.1% per year.
These 7 were selected because of their superior potential for immediate breakout.
Image: Bigstock
The Story of How Hertz Global (HTZ) Fell
Shares of Hertz Global Holdings (HTZ - Free Report) declined 11.5% to $1.16 in after-hours trading yesterday. This double-digit fall was caused by the news that billionaire investor Carl Icahn sold his stake in the company.
Per a regulatory filing, Carl Icahn sold his entire 55.3 million shares or 39% interest for 72 cents per share. Icahn, who was the company’s primary stakeholder, decided to divest his owned portion for a significant loss following Hertz Global’s decision to file for bankruptcy protection on May 22. Notably, Icahn has been a stakeholder at Hertz since 2014.
Naturally, the exit of such a high-profile investor is a huge setback for the company, which competes with the likes of the Zacks Rank #3 (Hold) player Avis Budget Group (CAR - Free Report) in the car rental space. The stock has already shed 91.7% of value so far this year compared with Its industry’s merely 8.3% decline.
Notably, Hertz’s business suffered massive damages due to the coronavirus pandemic with demand for car rental services vanishing as most people are staying indoors on account of lockdown and social distancing. Its high debt levels are a further concern with its revenue stream being badly hit. Notably, the company ended the March quarter with cash and cash equivalents worth $1,409 million whereas its total debt amounted to a staggering $20,598 million. The total debt to total capital ratio for Hertz increased to 0.93 at the end of first-quarter 2020 compared with 0.91 at the end of the fourth quarter of 2019.
Further intensifying its woes was the persistent management uncertainty that induced frequent shifts in the top brass over the past few years. The most recent change came on May 18 when Paul Stone replaced Kathryn Marinello as the company CEO.
Due to the above-mentioned headwinds, the company filed for insolvency safety. The bankruptcy filing, however, does not include Hertz’s operations in Europe, Australia and New Zealand as well as its franchised locations in the United States.
Notably, the company, which currently carries a Zacks Rank #4 (Sell), is not the only entity to have petitioned for liquidation in these coronavirus-ravaged times. Other companies including the Zacks #3 Ranked Latin American carrier LATAM Airlines and oil producer Whiting Petroleum , also carrying the same Zacks Rank, have also done the same thing
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.1% per year.
These 7 were selected because of their superior potential for immediate breakout.
See these time-sensitive tickers now >>