Retail Investors in Frenzy to Purchase Bankrupt Hertz Stock
It appears the drama surrounding car rental company Hertz Global Holdings (NYSE: HTZ) is far from over, and you should probably grab some popcorn before you continue reading. Hertz has come under some serious trouble amid the coronavirus pandemic, which ultimately wiped out the entirely of the travel industry. As a result, Hertz missed substantial lease payments back in April, and was ultimately unable to make a forbearance agreement with its lenders, now, the company has no other choice but to file for bankruptcy.
In the meantime, the US federal government has been happily purchasing corporate bond ETFs – some of which hold Hertz bonds. Thus, the Fed is inadvertently a stakeholder in Hertz’s bankruptcy process. But wait, there’s more! According to Robintrack, which analyzes stock purchasing activity on Robinhood, Hertz was the second most popular stock on Wednesday, with retail investors flocking to buy the bankrupt company’s stock. As a result, Hertz’s recently-worthless stock increased by nearly 168%, reaching a price of $1.49 and then close at $1.31.
Maybe the Fed’s stimulus checks have started a fire in investor’s pockets or there is a full moon to blame, but this is utter madness.
And now here’s the grand finale: All while retail investors are going mad purchasing a bankrupt company’s stock, billionaire investor Carl Icahn – who was Hertz’s biggest shareholder, is dumping his shares right into their open arms.
Information for this briefing was found via Bloomberg and Zero Hedge. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
