Hertz is looking to raise $1 billion in a share sale to capitalize on its almost 1,000% market rally since filing for bankruptcy
- Hertz is looking to raise $1 billion in a share sale after its bankruptcy, The Wall Street Journal reported on Thursday.
- The car-rental company is asking a bankruptcy judge to approve a deal with Jefferies LLC that could allow it to sell 246.8 million unissued shares, The Journal said.
- The stock had exploded by almost 1,460% since the end of May before prices took a beating this week. On Friday, it was about 685% above its May 26 low.
- Hertz has also received a delisting notice from the New York Stock Exchange but is appealing it.
- Track the price of Hertz live here.
Hertz is looking to sell up to $1 billion worth of shares to capitalize on its explosive stock-market growth even though it filed for bankruptcy protection last month, The Wall Street Journal reported on Thursday.
The Journal said the company was asking a bankruptcy judge to give the green light for a deal with Jefferies LLC that could allow it to sell 246.8 million unissued shares.
After filing for bankruptcy on May 22, Hertz saw shares plunge to an all-time low of $0.40. But they've rebounded sharply in recent days.
The company's stock had exploded by almost 1,460% since the end of May before prices took a beating this week. On Friday, it was about 685% above its May 26 low.
According to The Journal, Hertz's lawyers said on Thursday that "the recent market prices of and the trading volumes in Hertz's common stock potentially present a unique opportunity" to raise funds on more favorable terms than the strings-attached loans that insolvent firms often get.
The company is also reportedly planning to ask the US Bankruptcy Court to exit leases for 144,372 vehicles, saying that it could help it save $80.3 million a month.
Day traders have piled into Hertz, along with other bankrupt countries such as JCPenney, despite the overwhelming odds that shareholders will be wiped out during bankruptcy proceedings.
Hertz said this week in a regulatory filing that it received a delisting notice from the New York Stock Exchange on May 26, four days after it filed for bankruptcy. Hertz has appealed the delisting, and its shares will continue to trade on the exchange for now.
On Friday morning, Hertz shares were trading at $3.13, up 51% from the day's open.