Hertz skyrockets 825% since filing for bankruptcy as Robinhood traders pile in

• Since filing for bankruptcy in late May, Hertz has surged 825%.
• That's not what investors normally expect for a company that declared it can't meet its debt obligations.
• Hertz has surged higher following a steady drip of positive economic data that points to a recovery from the damage caused by the coronavirus.
• While retail investors on Robinhood loaded up on the stock, billionaire investor Carl Icahn liquidated his entire stake at 70 cents a share, for a loss of more than $1.8 billion.
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Since Hertz filed for bankruptcy in late May, shares have surged as much as 825%, and are up more than 100% today alone.

That's not exactly what investors would expect from a company that said it can't meet its debt obligations.

As the coronavirus pandemic brought travel to a sudden halt, Hertz suffered significantly as a bulk of its revenue relies on travelers flowing through airports.

Hertz announced its bankruptcy filing on the evening of Friday, May 22.

Shares opened lower on the news on May 26 at 41 cents, hitting a low of 40 cents.

Since then, shares surged as much as 825% to a high of $3.70 on Friday.

One investor who missed out on the massive rally is billionaire Carl Icahn, who has been invested in Hertz since 2014.

In a Securities and Exchange Commission filing, Icahn detailed why he sold his Hertz position at an average price of 72 cents, representing a loss of more than $1.8 billion.

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Taking the other side of Icahn's Hertz trade are retail investors, as evidenced by a surge in Robinhood accounts that own the stock.

Prior to the bankruptcy filing, roughly 43,000 Robinhood accounts owned shares of Hertz. That number has nearly doubled to 73,000 as of Friday.

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As travelers start flying again, Hertz' business can recover, but whether or not their equity will be around to participate in that upside remains to be seen — the stock of a company that goes through with bankruptcy tends to get wiped out completely.

Technically, shares of Hertz rallied to their 50-day moving average of $3.78 and have since been rejected.

The stock remains in a downtrend despite the face-ripping rally.

Shares of Hertz are 80% lower year-to-date.

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