Hertz pauses plan to sell $500 million in potentially worthless stock after SEC weighs in

• Hertz paused its plan to sell as much as $500 million in new, high-risk shares on Wednesday after the Securities and Exchange Commission raised concerns with the sale.
• The offering was "promptly suspended" after discussions with SEC staff, and is "pending further understanding of the nature and timing of the Staff's review," Hertz said in a regulatory filing.
• The newly bankrupt company's stock was briefly halted earlier Wednesday following news of the SEC's issues.
• Watch Hertz trade live here.

Hertz halted its plan to offer up to $500 million in new shares after the Securities and Exchange Commission raised issues with the sale.

In a regulatory filing published Wednesday afternoon, the bankrupt car-rental chain said its plans for the offering were "promptly suspended" after discussions with SEC staff. Any revival of the stock sale is "pending further understanding of the nature and timing of the Staff's review," the company added.

Hertz stock was paused late Wednesday morning after SEC Chairman Jay Clayton noted his concern with the planned offering.

"In this particular situation, we have let the company know that we have comments on their disclosure," Jay Clayton, chairman of the SEC, said on CNBC. "In most cases when you let a company know that the SEC has comments on their disclosure they do not go forward until those comments are resolved."

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The last-minute stock sale was meant to capitalize on Hertz stock's outsized volatility over recent weeks. Hordes of retail investors betting on an unlikely reemergence from bankruptcy piled into the firm, driving shares as high as $6 each from $0.80 just days before.

Even if the sale moved forward, the firm noted that major risks loomed over participating investors. Hertz cautioned on June 11 that "the common stock could ultimately be worthless" should bankruptcy proceedings continue, as creditors and bondholders are slated to receive funds before shareholders see any cash returned.

Hertz closed at $1.96 per share on Wednesday, up roughly 0.5% from Tuesday's close.

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