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<ul class="summary-list"><li><keyword id="187854" type="CITY" weightage="60" keywordseo="Hertz">Hertz</keyword> said Thursday its restructuring plan has been confirmed by court and it is set to exit bankruptcy on June 30.</li><li>The exit paves the way for creditors to be paid in full and existing shareholders to receive more than $1 billion of value. </li><li>Typically, in a corporate bankruptcy case like Hertz's, equity shareholders would receive nothing.</li></ul><a href="https://markets.businessinsider.com/stocks/htzgq-stock?utm_source=markets&amp;utm_medium=ingestgest">Hertz</a> shareholders are one step closer to seeing more than $1 billion of value returned. The car rental giant and original "meme stock" said on Thursday its restructuring plan has been confirmed by a bankruptcy court, paving the way for creditors to be paid in full and existing shareholders to receive more than $1 billion of value.Andrew Glenn, who championed the deal for shareholders as the managing partner of Glenn Agre Bergman &amp; Fuentes, told Insider he's "thrilled, but not surprised" that the court approved the deal. "We put forward the highest and best value and the court recognized that extraordinary outcome in her comments at the end of the hearing," he told Insider, speaking about Delaware bankruptcy judge Mary F. Walrath's comments. The company is on target to exit Chapter 11 bankruptcy on June 30, Hertz said. "With the court's approval of our plan today and a committed new investor group, we are poised to exit Chapter 11 by the end of this month as a well-capitalized and even more competitive company, with the flexibility and resources to pursue exciting new growth opportunities," CEO Paul Stone said Thursday. The <a href="https://markets.businessinsider.com/news/stocks/wall-street-bets-hertzs-bankruptcy-shareholders-payout-stock-worthless-htzgq-2021-5-1030426699">rental-car company's emergence out of bankruptcy has come as a surprise to many</a>, particularly because the restructuring plan includes a payout to equity investors. Typically, in a corporate bankruptcy case like Hertz's, equity shareholders would receive nothing.Hertz has estimated shareholders will get a payout of $7-$8 a share, according to court papers cited by the <a href="https://www.wsj.com/articles/hertzs-mom-and-pop-investors-face-a-bankruptcy-process-not-designed-for-them-11623275886">Wall Street Journal. </a>When Hertz exits bankruptcy, all shareholders will receive $1.53 in cash per share, their portion of a 3% stake in the restructured business set aside for shareholders, and warrants for an additional 18% stake.Certain accredited shareholders in Hertz, like institutional investors and wealthier individuals, can forego the warrants and instead participate in an equity rights offering, according to <a href="https://www.wsj.com/articles/hertzs-complex-shareholder-payout-explained-11623358891">WSJ Pro Bankruptcy</a>.Hertz's plan was approved by more than 97% of voting shareholders. It will eliminate over $5 billion of debt, including all of Hertz Europe's corporate debt, and will provide more than $2.2 billion of global liquidity to the reorganized company. Hertz rose as much as 2.9% to $7.05 apiece on Friday before paring back gains. The rental car company traded around $6.92 as of Friday 12:45 pm E.T.

Hertz's Chapter 11 restructuring plan has been confirmed by a bankruptcy court, paving the way for a $1 billion shareholder payout

<ul class="summary-list"><li>Shares of Hertz surged as much as 68% to $6.20 after the bankrupt car rental company accepted a takeover bid that would give shareholders a rare payout.</li><li>The winning bid will pay current shareholders close to $8 a share.</li><li id="recirc">The rental car company was the target of day-traders last summer when it first announced it would file for bankruptcy. </li></ul>Shares of Hertz surged as much as 68% to $6.20 after the bankrupt car rental company accepted a takeover bid that would give shareholders a rare payout. Hertz Global Holdings announced on Wednesday that it accepted a $6 billion bid from a group of investors including Knighthead Capital management, Certares Opportunities, and Apollo Capital Management to exit Chapter 11 bankruptcy. The car rental company hopes to exit from bankruptcy at the end of June. According to <a href="https://www.wsj.com/articles/hertz-bankruptcy-auction-yields-winner-to-back-chapter-11-exit-11620825844">The Wall Street Journal</a>, the winning bid will pay current shareholders close to $8 a share. In corporate bankruptcies it's unusual for shareholders to receive any payout. In March, Hertz detailed its reorganization plan which <a href="https://markets.businessinsider.com/news/stocks/hertz-stock-investors-will-not-be-paid-back-under-a-reorganization-plan-2021-3-1030146181">revealed that shareholders would receive no payout. </a>Shares of the company pared back gains and were trading around $5.84 as of Wednesday 3:10 p.m. ET. The rental car company was the<a href="https://markets.businessinsider.com/news/stocks/hertz-stock-price-skyrockets-since-filing-bankruptcy-traders-global-holdings-2020-6-1029285231"> target of day-traders last summer</a> when it first announced it would file for bankruptcy. The stock spiked as much as 825% in just a matter of weeks before paring gains. Non-accredited and non-institutional equity equity holders will likely not qualify to participate in the rights offering of the reorganized Hertz, <a href="https://www.bloomberg.com/news/articles/2021-05-12/once-doomed-hertz-rebounded-so-much-even-redditors-were-right">Bloomberg first reported</a>. Knighthead and Certares won with a plan that values Hertz, including debt, at around $7.4 billion, Bloomberg said. The proposal is set to fully repay debt holders, and will also hand institutional and accredited stock investors around $240 million in cash and the chance to participate in either a $1.6 billion rights offering or warrants for about 20% of the reorganized company. The proposal will need to be approved by the US Bankruptcy Court.

Bankrupt Hertz soars 68% after accepting a takeover bid that would give a rare payout to stock investors

<ul class="summary-list"><li>Retail traders helped spur a nearly 825% spike in <keyword id="187854" type="CITY" weightage="60" keywordseo="Hertz">Hertz</keyword> last summer after it filed for bankruptcy.</li><li>They bought the stock even as Hertz said its shares could be "worthless."</li><li>Shareholders will receive a payout in Hertz's takeover bid, vindicating retail traders' instincts.<a href="https://www.businessinsider.com/?hprecirc-bullet"></a></li></ul>Long before GameStop and Reddit's <keyword id="10658052" type="UNKNOWN" weightage="60" keywordseo="wall-street-bets">Wall Street Bets</keyword> became synonymous, the social-media platform was enamored of another stock: <a href="https://markets.businessinsider.com/stocks/htzgq-stock">Hertz</a>.The car-rental company became the <a href="https://markets.businessinsider.com/news/stocks/hertz-stock-price-skyrockets-since-filing-bankruptcy-traders-global-holdings-2020-6-1029285231?utm_source=markets&amp;utm_medium=ingestgest">target of Reddit-fueled traders last summer</a> when it announced it would file for <a href="https://www.businessinsider.com/hertz-filing-for-bankruptcy-as-early-as-this-weekend-report-2020-5?utm_source=markets&amp;utm_medium=ingestgest">bankruptcy</a>. Shares of Hertz <a href="https://markets.businessinsider.com/news/stocks/hertz-stock-price-skyrockets-since-filing-bankruptcy-traders-global-holdings-2020-6-1029285231?utm_source=markets&amp;utm_medium=ingestgest">spiked as much as 825%</a> in a matter of weeks. Wall Street onlookers were scratching their heads, wondering why retail investors were scooping up shares of a company that couldn't meet its debt obligations.In June, retail investors who steadfastly believed that "stonks only go up" were especially excited that the billionaire investor Carl Icahn missed out on Hertz's massive rally. Icahn had <a href="https://markets.businessinsider.com/news/stocks/investor-carl-icahn-sells-entire-hertz-stake-2-billion-loss-2020-5-1029240688?utm_source=markets&amp;utm_medium=ingest#:~:text=Carl%20Icahn%20dumped%20his%2039,week%2C%20a%20financial%20filing%20showed.wed.">sold his Hertz position at an average price of $0.72</a>, representing a loss of more than $1.8 billion."Good job guys. Hertz is now a viable company again. Carl Icahn is a clown who bought high, sold low," a Wall Street Bets user <a href="https://www.reddit.com/r/wallstreetbets/comments/gx8p6h/hertz_bankruptcy_is_cancelled_by_robinhood/?utm_source=share&amp;utm_medium=web2x&amp;context=3ontext=3">commented</a> last summer.Even Hertz itself didn't have as much faith in its stock as the retail traders did. When the company issued more shares in June, it said its stock could be "worthless.""We are in the process of a reorganization under chapter 11 of title 11, or Chapter 11, of the United States Code, or Bankruptcy Code, which has caused and may continue to cause our common stock to decrease in value, or may render our common stock worthless. Investing in our common stock involves a high degree of risk," the company said in a filing with the Securities and Exchange Commission.Typically, in a corporate bankruptcy case like Hertz's, equity shareholders would receive nothing. In March, Hertz unveiled its reorganization plan, which <a href="https://markets.businessinsider.com/news/stocks/hertz-stock-investors-will-not-be-paid-back-under-a-reorganization-plan-2021-3-1030146181?utm_source=markets&amp;utm_medium=ingestgest">said shareholders would receive no payout</a>.But on Wednesday, Hertz announced that it had accepted a $6 billion bid from a group of investors - Knighthead Capital Management, Certares Opportunities, and Apollo Capital Management - to exit bankruptcy. Knighthead's plan values Hertz at about $7.4 billion including debt, <a href="https://www.bloomberg.com/news/articles/2021-05-12/once-doomed-hertz-rebounded-so-much-even-redditors-were-right">according to Bloomberg</a>. The winning bid would pay shareholders close to $8 a share.Read more: <a href="https://www.businessinsider.com/crypto-trading-tips-ethereum-outlook-young-billionaire-sam-bankman-fried-2021-5" target="_blank" rel="noopener">A 29-year-old crypto billionaire who's perfected digital-currency arbitrage shares 2 tips for investors looking to get started in trading - and explains why ether is unlikely to surpass bitcoin</a>As part of the Hertz proposal, institutional and accredited equity investors would be given about $240 million in cash and the chance to participate in either a $1.6 billion rights offering or warrants for about 20% of the reorganized company, Bloomberg reported.Many of the traders who speculated on Reddit likely won't qualify as institutional or accredited investors and therefore won't get new shares. But their instinct about the value of Hertz's stock turned out to be correct, even when much of Wall Street didn't believe so.The $8 share price is higher than what any retail investor who purchased last summer paid.Andrew Glenn, a managing partner of Glenn Agre Bergman &amp; Fuentes who orchestrated the winning bid, told Insider the equity payout to shareholders was "unprecedented.""Just six weeks ago, shareholders were going to get nothing, and now they're getting upwards of $8 a share," Glenn said. "That doesn't happen every day in bankruptcy. In fact, I've never seen it happen."He added that a confluence of events had led to the success for the equity shareholders and Hertz's valuation: the V-shaped recovery, pent-up demand for travel, and a shortage of rental cars as many companies sent their cars to the used-car market during the pandemic."It's just a perfect storm that happened first gradually and then very quickly over the first quarter of this year and really the last two months," he said. "Our clients saw that trend happening before it unfolded, they had conviction as to the valuation, and they entered into the bankruptcy and became the mouthpiece in court for the Knighthead proposal."Shares of Hertz extended their gains for the second day in a row on Thursday, jumping as much as 11%, to $6.36. That followed a nearly 70% surge on Wednesday.

Wall Street Bets was right: Hertz's bankruptcy auction will actually give shareholders a handsome payout - even after Wall Street decided the stock was worthless

Long before GameStop and Reddit's Wall Street Bets became synonymous, the social-media platform was enamored with another stock: <keyword id="187854" type="CITY" weightage="60" keywordseo="Hertz">Hertz</keyword>.The car-rental company became the <a href="https://markets.businessinsider.com/news/stocks/hertz-stock-price-skyrockets-since-filing-bankruptcy-traders-global-holdings-2020-6-1029285231?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingestm=ingest">target of Reddit-fueled traders in the summer of 2020</a> following its announcement that it would file for <a href="https://www.businessinsider.com/hertz-filing-for-bankruptcy-as-early-as-this-weekend-report-2020-5?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingestm=ingest">bankruptcy</a>.Hertz's business was decimated as the coronavirus pandemic ground travel to a halt, forcing the <a href="https://www.businessinsider.com/hertz-new-ceo-paul-stone-after-kathryn-marinello-resigns-2020-5">CEO to resign</a> as the company missed lease payments and <a href="https://www.businessinsider.com/hertz-rental-car-company-prepares-for-possible-bankruptcy-report-2020-4">laid off 10,000 workers</a> in a month. When Hertz filed for Chapter 11, it was one of the largest corporate casualties of the pandemic. But Hertz caught the attention of retail investors. In a matter of weeks after the bankruptcy announcement, traders bid up shares of Hertz by 825% percent while Wall Street onlookers scratched their heads and wondered why retail investors were scooping up shares of a company that couldn't meet its debt obligations.Even Hertz itself didn't have as much faith in its stock as the retail traders did. When the company issued more shares a month later, it said its stock could be "worthless."But almost a year after declaring bankruptcy, the retail investors' instincts were proven correct. In May 2021, Hertz accepted a $6 billion bid from a group of investors - Knighthead Capital Management, Certares Opportunities, and Apollo Capital Management - to exit bankruptcy. The reorganization plan also included a payout to equity shareholders, an unusual outcome in corporate bankruptcies. "That doesn't happen every day in bankruptcy. In fact, I've never seen it happen," said Andrew Glenn, managing partner of Glenn Agre Bergman &amp; Fuentes who orchestrated the winning bid for the equity shareholders. Hertz estimated shareholders would get a payout of $7-$8 a share, which is more than what any retail investor who purchased in the summer of 2020 paid for the stock. Accredited investors like wealthier individuals and institutions also were able to participate in an equity rights offering to buy shares of Hertz at a discount to Hertz's own valuation under its bankruptcy plan. In total, more than $1 billion of value was to be returned to shareholders, Hertz said. According to Glenn, a confluence of events had led to the success for the equity shareholders and Hertz's valuation: the V-shaped recovery, pent-up demand for travel, and a shortage of rental cars as many companies sent their cars to the used-car market during the pandemic. By mid-June, ahead of its exit from bankruptcy, Hertz was hovering around $8 a share for a year-to-date gain of 536%. We want to allow our readers to bid on the future of trading by auctioning off seminal moments of this shifting stock history - like this one above. That is why this article and the above image are part of <keyword id="31671" type="CITY" weightage="100" keywordseo="markets">Markets</keyword> Insider's NFT project. Here you can find an <a href="https://markets.businessinsider.com/news/stocks/markets-insider-selling-meme-stock-nfts-2021-7">overview of the project</a>, and the <a href="https://opensea.io/bundles/market-insider-hertz-stock-OGu">live auction on OpenSea</a>. It is one in a series of three produced by Markets Insider.Please note that this NFT is subject to <a href="https://markets.businessinsider.com/news/currencies/insider-inc-nft-license-2021-2021-7">Insider's license terms</a>.

Hertz: the original meme stock rises from the ashes of bankruptcy

<ul class="summary-list"><li>A 42-year-old electronic technician made about $8,000 from his <keyword id="187854" type="CITY" weightage="60" keywordseo="Hertz">Hertz</keyword> Investment, The Wall Street Journal reported.</li><li>"God told me to put money into Hertz," he said. "I know it sounds crazy."</li><li>Hertz emerged from bankruptcy this month after filing for Chapter 11 last year.</li></ul><a href="https://markets.businessinsider.com/stocks/htzgq-stock">Hertz</a>, one of the original meme stocks, was thought by many to be worthless when it filed for bankruptcy at the start of the pandemic in 2020. Yet, the stock saw a surge of popularity among retail investors, who piled into the shares which the company itself said could go to zero.Investors on forums like Reddit's Wall Street Bets often say they choose to trust their instincts more than fundamentals when it comes to stock picking, which is exactly what a 42-year-old electronic technician from Glenwood, Illinois did, according to a report in <a href="https://www.wsj.com/articles/god-told-me-to-put-money-into-hertz-how-small-investors-are-upending-wall-street-11622113200?mod=markets_lead_pos5">The Wall Street Journal</a> Thursday. Damien Roscoe, a 42 year-old electronic technician, told <a href="https://www.wsj.com/articles/god-told-me-to-put-money-into-hertz-how-small-investors-are-upending-wall-street-11622113200?mod=markets_lead_pos5">The Journal</a> that he made about $8,000 in profits from buying Hertz this spring."God told me to put money into Hertz," Roscoe said. "I know it sounds crazy."Before it finalizing a restructuring that does in fact pay some shareholders back, the company in March <a href="https://www.prnewswire.com/news-releases/hertz-global-holdings-reaches-key-milestone-in-restructuring-files-plan-of-reorganization-and-disclosure-statement-301238331.html" target="_blank" rel="noopener">detailed</a> reorganization plan that revealed <a href="https://markets.businessinsider.com/news/stocks/hertz-stock-investors-will-not-be-paid-back-under-a-reorganization-plan-2021-3-1030146181">shareholders will get nothing</a>. "Everyone was, 'Y'all are stupid for buying stock in a bankrupt company,'" Roscoe told <a href="https://www.wsj.com/articles/god-told-me-to-put-money-into-hertz-how-small-investors-are-upending-wall-street-11622113200?mod=markets_lead_pos5">The Journal</a>. "But driving around … I just believed in it."However, on May 12, shares of Hertz surged after the <keyword id="1064775" type="PERSON" weightage="60" keywordseo="car-rental">car rental</keyword> company <a href="https://markets.businessinsider.com/news/stocks/hertz-stock-price-soars-after-accepting-a-takeover-bid-bankruptcy-2021-5-1030422840">accepted a $6 billion takeover bid</a> that would give shareholders a rare payout. Hertz reversed course and is looking to exit bankruptcy at the end of June.The stock has nearly tripled in value in May.Roscoe's experience is part of a larger trend of retail investors betting big on these so-called meme stocks, often with little more than a gut feeling that their investment will perform. And after a wild start to the year for many stocks backed by Reddit traders, the meme-stock trade is making a comeback. <a href="https://markets.businessinsider.com/news/stocks/amc-stock-price-doubles-in-4-days-redditors-rally-2021-5-1030472772">AMC has doubled its value in just four days</a>, while Reddit favorite <keyword id="363661" type="COMPANY" weightage="60" keywordseo="GameStop">GameStop</keyword> has also surged on renewed retail enthusiasm this week. The move has been so sharp that institutional players are warning against shorting the names. "The first thing you don't do is you don't short these stocks," Joe Terranova, senior managing director at Virtus Investment Partner, said in an interview with CNBC Thursday morning.

A 42-year-old electronic technician says he made $8,000 betting on bankrupt Hertz after God told him to invest

<ul class="summary-list"><li>The car-rental giant <keyword id="187854" type="CITY" weightage="60" keywordseo="Hertz">Hertz</keyword> <a href="https://www.businessinsider.com/hertz-filing-for-bankruptcy-as-early-as-this-weekend-report-2020-5">filed for bankruptcy on Friday</a>.</li><li>A <a href="https://www.sec.gov/ix?doc=/Archives/edgar/data/47129/000110465920065674/tm2020858d1_8k.htm">federal filing</a> on Tuesday said Hertz paid out $16.2 million among its 340 top executives on May 19 as part of a retention program to ensure executives don't leave the company.</li><li>The filing did not clarify how the thousands of Hertz employees who are not top executives are expected to fare during the bankruptcy.</li></ul>Hertz paid its 340 top executives an average of $47,709 a few days before it filed for bankruptcy, the car-rental company <a href="https://www.sec.gov/ix?doc=/Archives/edgar/data/47129/000110465920065674/tm2020858d1_8k.htm">said in a federal filing</a> on Tuesday.That's $16.2 million in total, distributed on May 19. Hertz, which was founded in 1918, filed for bankruptcy protection on Friday.Its CEO, Paul Stone, got the biggest payday, at $700,000, though he took the role <a href="https://www.businessinsider.com/hertz-new-ceo-paul-stone-after-kathryn-marinello-resigns-2020-5">days before Hertz's bankruptcy filing</a>. Hertz's chief financial officer, Jamere Jackson, received $600,000, and Chief Marketing Officer Jodi Allen got just under $190,000.Hertz said in the Tuesday filing that "key employees at the director level and above" received the cash payments to ensure they stay at the company. It gave four reasons for the payouts:<ol><li>Hertz and its employees are facing "financial and operational uncertainty" thanks to the coronavirus pandemic, which has had an "adverse impact on the global travel sector."</li><li>The "key employees" have undertaken "substantial additional efforts" with "a reduced work force in response to an extremely challenging business environment."</li><li>Because of the bankruptcy filing, top executives have lost out on their annual bonus plan.</li><li>There's a risk that "key employees" may leave Hertz when the company needs them.</li></ol>The filing did not make clear how its nonexecutive employees might fare, and Hertz did not immediately respond to a request for comment. <a href="http://app.quotemedia.com/data/downloadFiling?webmasterId=101533&amp;ref=114823456&amp;type=PDF&amp;formType=10-K&amp;dateFiled=2020-02-25&amp;cik=0001657853&amp;CK=1657853&amp;symbol=0001657853&amp;companyName=Hertz+Global+Holdings%2C+Inc.me=Hertz+Global+Holdings%2C+Inc.">According to its most recent annual report</a>, Hertz employs 38,000 people worldwide, mostly in the US. (That's likely now about 28,000, as Hertz said last month that it would <a href="https://www.reuters.com/article/us-hertz-layoffs/us-car-rental-company-hertz-to-lay-off-10000-staff-on-coronavirus-hit-idUSKBN2222XD">lay off 10,000 employees</a>.)<h2>When a company goes bankrupt, executives usually get a parachute — and workers get burned</h2>Massive bankruptcies at other public companies have included big paydays for top executives who stick around. Sears, which filed for bankruptcy in the fall of 2018, made available up to $4.2 million to give quarterly retention bonuses <a href="https://www.sec.gov/Archives/edgar/data/1310067/000119312519188547/d37103dex992.htm">to more than 300 executives</a>.Meanwhile, workers like Sheila Brewer, who was a full-time employee at Sears-owned Kmart for 17 years, did not receive their full severance pay, making it challenging to pay bills even as executives received thousands in bonuses."It was a big toll emotionally and financially," Brewer <a href="https://www.theguardian.com/business/2018/dec/01/sears-workers-kmart-retail-eddie-lampert">told The Guardian</a> in December 2018. "It's a big slap in the face, them telling me I can't get the rest of my severance because of bankruptcy."Coronavirus-related bankruptcies have seemed to still favor the executive over the associate. JCPenney, which filed for bankruptcy <a href="https://www.businessinsider.com/jcpenney-files-for-bankruptcy-amid-coronavirus-pandemic-2020-5">on May 15</a>, had given CEO Jill Soltau a $4.5 million bonus and three other top executives a $1 million bonus — all distributed a few days before the company announced its bankruptcy filing.Under these executives, JCPenney accrued $3.7 billion in debt. Like JCPenney, Hertz was struggling long before the coronavirus took down global travel, <a href="https://www.businessinsider.com/hertz-filing-for-bankruptcy-as-early-as-this-weekend-report-2020-5">carrying $19 billion total in debt</a>.Are you a Hertz employee with an opinion to share on the bankruptcy? Email <a href="mailto:rpremack@businessinsider.com">rpremack@businessinsider.com</a>.Read the original article on <a href="https://www.businessinsider.com/hertz-bankruptcy-ceo-top-executives-giant-payday-2020-5">Business Insider</a>

The CEO of Hertz will get a $700,000 payday as his 102-year-old company crumbles into bankruptcy

<a href="https://newsletter.businessinsider.com/join/4np/10-things-opening-bell&amp;hash=8122c716833601fc1471f79af063b104?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingesttm_medium=ingest" target="_blank" rel="noopener">Welcome to 10 Things Before the Opening Bell. Sign up here to get this email in your inbox every morning.</a><a href="http://newsletter.businessinsider.com/join/4np/insider-investing?nr_email_referer=1&amp;utm_sou%5Bu%5B" target="_blank" rel="noopener">Sign up for Insider Investing</a> for your weekly <keyword id="31671" type="CITY" weightage="100" keywordseo="markets">markets</keyword> analysis.Live event invite: Join us Tuesday, May 18 at 12 p.m. ET for "Master Your Money," where personal finance professionals help set you up to build wealth. <a href="https://event.on24.com/wcc/r/3107184/D69CD0357138604E9AD554061C41F997/2238222?partnerref=editorial_newsletter" target="_blank" rel="noopener">Register here.</a>1. US futures rise as the Fed calms inflation concerns. See <a href="https://markets.businessinsider.com/news/stocks/stock-markets-today-us-futures-inflation-federal-reserve-bond-yields-2021-5-1030429946">what markets are doing</a>.2. Dogecoin is up another 25%. Elon Musk had<a href="https://markets.businessinsider.com/currencies/news/dogecoin-tesla-payment-elon-musk-crypto-bitcoin-environment-stocks-2021-5-1030429931">tweeted that Tesla might be accepting dogecoin payments</a>. 3. Cryptocurrency exchange Binance is under investigation by the Justice Department and the IRS. <a href="https://markets.businessinsider.com/currencies/news/cryptocurrency-exchange-binance-us-investigation-doj-irs-bloomberg-report-2021-5-1030427383">No accusations have been made</a> so far. 4. The rise in inflation is no surprise to Michael Burry. The "Big Short" investor <a href="https://markets.businessinsider.com/news/stocks/big-short-michael-burry-predicted-inflation-spike-investor-warned-tweets-2021-5-1030430103">sounded the alarm more than once a while ago.</a>5. Hertz's bankruptcy auction will give shareholders a decent payout. <a href="https://markets.businessinsider.com/news/stocks/wall-street-bets-hertzs-bankruptcy-shareholders-payout-stock-worthless-htzgq-2021-5-1030426699">Retail traders had bought shares</a> after the company filed for bankruptcy last summer.6. Earnings expected. Watch out for <a href="https://markets.businessinsider.com/earnings-calendar">Honda Motor Co, Toshiba, Knorr-Bremse and Samsung Life Insurance</a>. 7. On the data docket. <a href="https://markets.businessinsider.com/economic-calendar">US retail sales and industrial production data</a> is due. 8. Bank of America says Wall Street stock pickers remain vulnerable to an inflation shock. The firm recommends <a href="https://www.businessinsider.com/inflation-hedges-trades-to-protect-against-stock-market-shock-subramanian-2021-5?r=opening-bell" target="_blank" rel="noopener">2 specific trades for protection as prices rise</a>.9. Crypto prices have been on a rollercoaster ride lately. 3 experts share <a href="https://www.businessinsider.com/crypto-trading-strategy-charts-to-watch-bitcoin-prices-drop-experts-2021-5?r=opening-bell" target="_blank" rel="noopener">the 7 essential charts and data points to watch</a> when prices dramatically drop.10. Bank of America explains why mid-caps are set for 'one of the best periods' of outperformance in modern history. The firm also shares <a href="https://www.businessinsider.com/etfs-to-buy-mid-large-cap-stocks-bank-of-america-2021-5?r=opening-bell" target="_blank" rel="noopener">its 9 top-rated ETFs that track large- and medium-sized companies</a>.

10 things you need to know before the opening bell

<ul><li><keyword id="15937" type="PERSON" weightage="60" keywordseo="Carl-Icahn">Carl Icahn</keyword> is studying <keyword id="2420795" type="PERSON" weightage="60" keywordseo="cryptocurrencies">cryptocurrencies</keyword> and could shovel over $1 billion into the space.</li><li>The billionaire investor cautioned aggressive stimulus will ultimately hammer stocks.</li><li>Icahn disclosed a stake in Allstate and called for stricter financial regulations.</li><li><a href="https://www.businessinsider.com/?hprecirc-bullet">See more stories on Insider's business page</a>.</li></ul>Activist investor Carl Icahn revealed he's mulling a billion-dollar <a href="https://wazirx.com/signup?invite=2kpah6gr&amp;utm_source=business-insider&amp;utm_medium=referral&amp;utm_campaign=microsite" id="docs-internal-guid-d1ade066-7fff-bd86-e704-20db62832389">cryptocurrency</a> bet, disclosed a new stake in Allstate, and warned excessive federal spending will eventually tank the stock market in a pair of <a href="https://www.bloomberg.com/news/articles/2021-05-26/icahn-on-inflation-investing-and-what-he-misses-about-nyc-q-a">Bloomberg</a> <a href="https://www.youtube.com/watch?v=ZR_P3Gi3CiM">interviews</a> this week. The billionaire boss of <keyword id="1490815" type="ORGANIZATION" weightage="60" keywordseo="Icahn-Enterprises">Icahn Enterprises</keyword> also defended <keyword id="334157" type="COMPANY" weightage="60" keywordseo="Reddit">Reddit</keyword> and <keyword id="1268253" type="PERSON" weightage="60" keywordseo="Robinhood">Robinhood</keyword>, admitted he missed a trick by selling Hertz last year, and called for tougher financial regulations to protect <a href="https://wazirx.com/signup?invite=2kpah6gr&amp;utm_source=business-insider&amp;utm_medium=referral&amp;utm_campaign=microsite" id="docs-internal-guid-87d6c0c5-7fff-181e-ee6b-04d86138b471">investors</a>. <h2>Here are Icahn's 10 best quotes from the interviews, lightly edited and condensed for clarity:</h2>1. "It takes a great deal of patience, permanent capital, and negotiating skill - as well as a very thick skin - to be truly a successful activist. Perhaps that's why it is so lucrative and the best investing model that exists today." 2. "I'm not necessarily looking at what to buy at this time. I'm just looking at the whole business and how I might get involved in it with Icahn Enterprises in a relatively big way. I do think it's here to stay in one form or another. - disclosing that he might plow $1 billion or $1.5 billion into cryptocurrencies. 3. "The criticism is a little wrong-headed. 'What's the value of a cryptocurrency?' Well, what's the value of a dollar? The only value of the dollar is you can use it to pay taxes." 4. "We do own Allstate, it's a good example of a company that was undervalued. We bought it around six months ago when it was in the $90s. We never even had to talk to the company because its bosses did what they said there were gonna do. - Allstate, which has been revamping its business to reduce costs and interact directly with customers, boasts a stock price north of $135 today. 5. "We're pumping a lot of money into this economy. Obviously you're going to get <keyword id="22195" type="COMPANY" weightage="60" keywordseo="Inflation">inflation</keyword>, which will eventually cause higher interest rates and a major correction in the market. But when it occurs and how severe it will be is a question that is impossible to answer at this time." 6. "Is it gonna go up and how long is it gonna go up for? I don't think it's gonna end tomorrow, I don't think you should go out and sell your stocks tomorrow. But sooner or later that <a href="https://markets.businessinsider.com/news/stocks/warren-buffett-warned-against-speculating-day-traders-dont-care-2020-6-1029347328">party's gonna have to be over</a>." - warning the boom in asset prices can't continue indefinitely. 7. "I sure <a href="https://markets.businessinsider.com/news/stocks/investor-carl-icahn-sells-entire-hertz-stake-2-billion-loss-2020-5-1029240688">missed the turn</a> there as far as Hertz is concerned. What the heck, you've gotta make mistakes in this business, there's nobody that doesn't. I congratulate those <a href="https://markets.businessinsider.com/news/stocks/wall-street-bets-hertzs-bankruptcy-shareholders-payout-stock-worthless-htzgq-2021-5-1030426699">guys that held it</a>." - on his decision to sell his Hertz shares at a loss last year, and the news that the bankrupt car-rental company's shareholders will receive a payout. 8. "I don't think Reddit and Robinhood and all of those guys are necessarily bad. They serve a purpose, money is <a href="https://markets.businessinsider.com/news/stocks/amc-entertainment-stock-price-debt-issuance-cash-bankruptcy-theaters-2021-1-1029982986">funneling back into companies</a>. Some of these companies might be okay, but a number of them, the risk-reward ratio is absurd." -Icahn described some meme stocks as "ridiculously priced" and warned there will be "a price to pay" in the form of higher inflation and future losses. 9. "Some of these egregious investments, who pays for them? In the end the small individual's gonna pay. We're going to excess in a lot of things." - Icahn highlighted shopping-mall debt and <keyword id="363661" type="COMPANY" weightage="60" keywordseo="GameStop">GameStop</keyword> as examples. 10. "We should do what we can to control Wall Street and this excess buying. We should be doing something to control fund management, we should be doing more corporate governance. If you did all that, a lot of these middle-class people wouldn't lose all the money they've invested when this thing hits." - calling for stricter government regulation of companies and <keyword id="31671" type="CITY" weightage="100" keywordseo="markets">markets</keyword>. <a href="https://forum.businessinsider.in/">For a more in-depth discussion, come on over to Business Insider Cryptosphere</a> — a forum where users can deep dive into all things crypto, engage in interesting discussions and stay ahead of the curve. SEE ALSO: <a href="https://www.businessinsider.in/cryptocurrency/news/investments-in-crypto-hit-17-billion-in-the-first-six-months-of-2021/articleshow/83740327.cms">Investments in crypto hit a new record of $17 billion, but Indian funds are yet to jump on the bandwagon</a> <a href="https://www.businessinsider.in/cryptocurrency/news/indian-cryptocurrency-exchange-wazirx-has-listed-shiba-inu-tokens-for-trading-in-indian-rupees/articleshow/82731429.cms">Chiacoin claims to be an eco-friendly cryptocurrency — here's how it works</a> <a href="https://www.businessinsider.in/cryptocurrency/news/here-is-why-a-ban-on-cryptocurrencies-may-not-be-even-possible/articleshow/82741310.cms">Is a ban on cryptocurrencies even possible?</a> <a href="https://www.businessinsider.in/cryptocurrency/news/latin-america-and-south-asia-show-two-ends-of-the-crypto-regulatory-spectrum/articleshow/83638437.cms">Even as Latin America embraces Bitcoin, Southeast Asia is clamping down on cryptocurrencies</a>

Carl Icahn teased a $1.5 billion crypto bet, called for stricter rules on Wall Street, and warned stocks will tumble in interviews this week. Here are the activist investor's 10 best quotes.

Now laid-off employees are paying the priceIn an attempt to explain why the company had <a href="https://www.businessinsider.com/google-layoffs-maps-cuts-investors-tech-2023-1">laid off 12,000 employees</a>, Sundar Pichai, the CEO of Google's parent company, Alphabet, <a href="https://www.businessinsider.com/google-layoffs-jobs-alphabet-work-employees-staff-sundar-pichai-2023-1">said executives decided to slash jobs</a> after a "rigorous review" of Google's internal structures and organization. Pichai suggested that the company "hired for a different economic reality" than the one it faced and that the layoffs were necessary to <a href="https://blog.google/inside-google/message-ceo/january-update/" target="_blank" rel="noopener">set Google up for the future</a>.But while Pichai, <a href="https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/at-280m-alphabet-s-sundar-pichai-is-2019-s-highest-paid-us-info-tech-ceo-59872469" target="_blank" rel="noopener">who made $280 million in compensation in 2019</a>, said he took "full responsibility for the decisions that led us here," he failed to elucidate those choices. He didn't mention that during his time at the helm Google has been <a href="https://www.businessinsider.com/google-android-appeal-in-4-billion-eu-antitrust-case-2022-9#">hit with billions of dollars' worth of antitrust fines</a>, been <a href="https://www.businessinsider.com/google-management-issues-code-red-over-chatgpt-report-2022-12">left in the dust</a> by <a href="https://www.bloomberg.com/opinion/articles/2022-12-07/chatgpt-should-worry-google-and-alphabet-why-search-when-you-can-ask-ai" target="_blank" rel="noopener">OpenAI's ChatGPT</a> despite "pivoting the company to be AI-first," and seen its <a href="https://www.businessinsider.com/search-web-email-google-streaming-online-shopping-broken-2022-4">core search product get steadily worse</a>. And though Pichai later said at a company town hall that "all roles above the senior-vice-president level will witness a very significant reduction in their annual bonus," <a href="https://www.businessinsider.com/google-layoffs-executive-bonuses-very-significant-cut-sundar-pichai-ceo-2023-1">including his own</a>, the vast majority of the pain from his missteps seemed to fall squarely on the shoulders of the 12,000 people who were let go. The employees who were laid off — via email — included <a href="https://affiliate.insider.com?postID=63d7e1715178b050851b8f2c&amp;site=bi&amp;u=https%3A%2F%2Fwww.theinformation.com%2Farticles%2Fgoogle-laid-off-high-performers-and-earners-while-brain-ai-lab-largely-spared" target="_blank" rel="noopener">several high-performing staff members</a> and longtime employees, such as <a href="https://www.businessinsider.com/google-layoffs-alphabet-jobs-pichai-email-slap-in-the-face-2023-1">an engineer who'd been at the company for 20 years</a> and who described the sudden layoff as a "slap in the face."This sort of responsibility dodging is running rampant around Silicon Valley. CEOs at companies like Amazon, Microsoft, Salesforce, and Meta set their companies on an unsustainable course, investing in boneheaded new ventures and assuming the pandemic-driven tech boom would be a new normal. Now that those expectations have been shattered, rank-and-file tech workers are bearing the brunt of these bad decisions, while the executives most responsible for the messes face little to no meaningful consequences.Any executive who participates in decision-making that leads to hundreds or thousands of people losing their jobs should be the one leading them out the door. Pichai and other tech CEOs shouldn't be making $280 million a year or even $1 million a year — they should be fired for poorly managing some of the largest companies in the world.<h2>CEOs made mistakes, workers bear the brunt</h2>In their layoff announcements, pretty much every tech company placed the blame for the cuts on the economy. At Amazon, the cuts were <a href="https://www.cnbc.com/2023/01/18/amazon-job-cuts-read-the-memos.html" target="_blank" rel="noopener">supposedly necessary because</a> of "supply chain difficulties, inflation, and productivity overhang" and economic uncertainty. <a href="https://www.businessinsider.com/salesforce-layoffs-marc-benioff-overhiring-profits-costs-economic-downturn-staff-2023-1">Salesforce CEO Marc Benioff cited</a> the "economic downturn we're now facing" as the reason for the company's 10% headcount reduction, and Workday <a href="https://www.sfgate.com/tech/article/bay-area-workday-layoffs-17754945.php" target="_blank" rel="noopener">laid off 3% of its workforce based on</a> a "global economic environment that is challenging for companies of all sizes." PayPal CEO Dan Schulman pinned the blame for his company's <a href="https://www.cnn.com/2023/01/31/business/paypal-layoffs/index.html" target="_blank" rel="noopener">decision to lay off 2,000 employees</a> on the "challenging macro-economic environment."But in many instances, the real source of concern at these companies comes down to boneheaded decisions made by CEOs — whether it's <a href="https://www.businessinsider.com/mark-zuckerberg-should-quit-meta-facebook-new-metaverse-company-2022-10">Mark Zuckerberg at the company formerly known as Facebook</a>, who authorized a hiring binge over the pandemic and invested billions of dollars into his metaverse folly before having to cut 11,000 jobs, or Tobi Lütke at Shopify, who laid off 1,000 people <a href="https://www.businessinsider.com/shopify-layoffs-10-percent-ceo-memo-2022-7">based on a bet on the future of e-commerce that "didn't pay off."</a>While many of these companies have made serious strategic blunders, layoffs won't solve those problems — cutting workers won't suddenly make the companies more productive or improve their products. And many of these tech behemoths are still eye-wateringly profitable, making the economic case for layoffs questionable. Microsoft's <a href="https://www.cnn.com/2023/01/24/tech/microsoft-earnings/index.html" target="_blank" rel="noopener">profits declined by 12%</a> in the last quarter of 2022 from the same quarter in 2021, but it still pulled in a whopping $16.4 billion. Amazon pulled down a profit of $2.8 billion in the most recent quarter, below the online-shopping highs of the pandemic but in line with its historical average. But the company still <a href="https://www.businessinsider.com/i-got-laid-off-from-amazon-felt-like-line-item-2023-1">turned around and laid off 18,000 employees</a>. It seems that when profits or even projected future profits slipped a bit, something had to give — and it certainly wasn't going to fall on the CEOs. When one company chose to lay off thousands of people, it became optically justifiable for other companies to follow suit — a natural way for the CEO to seem "disciplined" or "responsible" despite the brutal cost to employees. While they may protect the CEO's reputation or placate investors, layoffs are immensely damaging for workers, even well-paid tech employees. People who are laid off face <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5648004/" target="_blank" rel="noopener">long-term career damage</a> and harm to their <a href="https://www.gsb.stanford.edu/faculty-research/publications/relationship-between-workplace-stressors-mortality-health-costs-united" target="_blank" rel="noopener">mental and physical health</a>. Not to mention that layoffs are of dubious value to the company; studies have found that <a href="https://news.stanford.edu/2022/12/05/explains-recent-tech-layoffs-worried/" target="_blank" rel="noopener">layoffs are a net negative</a> for productivity, that they <a href="https://hbr.org/2022/12/what-companies-still-get-wrong-about-layoffs" target="_blank" rel="noopener">suppress innovation</a>, and that they can lead to a <a href="https://knowledge.wharton.upenn.edu/article/how-layoffs-cost-companies/" target="_blank" rel="noopener">long-term decline in profits</a>. Studies have also suggested that layoffs <a href="https://www.researchgate.net/publication/211390591_Downsizing_Effects_on_Survivors_Layoffs_Offshoring_and_Outsourcing" target="_blank" rel="noopener">make life harder</a> for the employees who weren't let go, especially since many of these companies <a href="https://www.businessinsider.com/facebook-cuts-employee-benefits-to-reduce-costs-after-layoffs-2022-12">cut back on benefits</a> and <a href="https://www.businessinsider.com/google-layoffs-mental-health-and-wellbeing-director-jobs-workers-tech-2023-1">other services</a> that could help remaining workers. Given the human and business downsides of layoffs, a CEO's top priority should be to avoid them at all costs.Some companies have managed to do just that. Apple has managed to cut costs without layoffs in part by <a href="https://www.marketwatch.com/picks/apple-ceo-tim-cook-asked-for-and-got-a-major-pay-cut-this-year-is-there-ever-a-time-when-some-of-us-should-accept-one-too-the-answer-is-yes-01674032911" target="_blank" rel="noopener">reducing Tim Cook's salary by 40%, to $49 million</a>. While one can't necessarily applaud a company for paying a CEO "just" $50 million, there's something to be said for the chief executive willing to slash their own pay before resorting to letting employees go. Similarly, <a href="https://www.businessinsider.com/intel-ceo-takes-pay-cut-reduce-costs-prevent-layoffs-2023-2">the chipmaker Intel's CEO took a 25% pay cut</a> and reduced the salaries of his executive team by 15% to avoid broad layoffs. For the companies that turned to job cuts, the blame rests squarely on the shoulders of their CEOs. As the sole person in charge, they're responsible for misjudging the macroeconomy, making terrible investments, and then following along with the industry in a shortsighted attempt to please Wall Street. And yet, despite a smattering of pay reductions, none of them have faced real consequences. By focusing on "broader economic uncertainty" rather than admitting the cutbacks are because of executive mismanagement, CEOs can save their reputation while sidestepping the blame.<h2>With great power comes no responsibility</h2>The blame-shifting of these tech companies and their CEOs is not unprecedented, or even that uncommon. Corporate America has pledged fealty to the almighty executive, applying a totally different evaluation matrix to CEOs than to other employees. Because of this noxious adulation for the most powerful person in the company, companies will contort themselves to try to save money in any way other than cutting the pay of or firing their most responsible and most expensive employee: the chief executive officer. <a href="https://www.epi.org/publication/ceo-pay-in-2021/#:~:text=From%201978%20to%202021%2C%20CEO,18.1%25%20from%201978%20to%202021." target="_blank" rel="noopener">CEO pay skyrocketed</a> by 1,460% from 1978 to 2021, and the ratio of average-worker pay to CEO pay ballooned from 20-to-1 in 1965 to 399-to-1 in 2021. And it's not as if this staggering rise in pay has made CEOs any better at their jobs. Top executives abandon companies <a href="https://www.nbcnews.com/business/business-news/why-have-more-1-000-ceos-left-their-post-past-n1076201" target="_blank" rel="noopener">when they anticipate a recession</a> and always treat workers as disposable, <a href="https://time.com/6204001/jobs-report-ceos-layoffs/" target="_blank" rel="noopener">even during a hot economy</a>. Analyses <a href="https://cepr.net/are-corporate-ceos-worth-20-million/" target="_blank" rel="noopener">have argued</a> that these staggering pay packages are far from justified. When high-ranking executives make a serious blunder, they almost always get the benefit of the doubt. The modern executive <a href="https://www.businessinsider.com/elon-musk-twitter-tesla-ceo-job-broken-chief-hypocrisy-officer-2022-11">lacks any actual responsibility</a> or oversight, only occasionally reporting to typically pliant boards. They're largely insulated from the consequences of their actions, even if they're performing poorly. If any other kind of worker made a series of decisions that led to a double-digit drop in profitability, they'd be threatened with termination or terminated. Instead, tech CEOs have passed the pain off to people who in many cases were performing well in their roles. And while many employees in tech and elsewhere have received generous severance packages, they pale in comparison to the <a href="https://www.cbsnews.com/minnesota/news/good-question-why-do-ceos-get-paid-so-much-to-leave/" target="_blank" rel="noopener">payouts that failed executives have gotten</a> on their way out the door. Take, for example, the car-rental company Hertz, which let go of 10,000 people in 2020 as it stumbled into bankruptcy, all while <a href="https://observer.com/2020/05/hertz-is-the-latest-to-give-execs-millions-while-firing-workers-and-going-bankrupt/" target="_blank" rel="noopener">paying its executives $16 million in bonuses</a>.If CEOs are expected — and paid — to be some visionary demigod at the top of an organization, they should be expected to bear that weight and pay a commiserate price when they mess up. At some point, the chief executive has to be held as accountable as the people they employ. There is no reason that the best-treated and highest-paid member of an organization should experience less scrutiny, unless the company does not truly care about operating efficiently.If companies are wary of firing top executives, then fine, refashion the job of the modern CEO. Instead of trying to be swashbuckling saviors with gobsmacking salaries allowed to operate the company with relative impunity, these top executives should focus on actual management and execution to sustainably grow their companies. Instead of focusing on short-term investor relations and public accolades, CEOs should put in the time to manage their companies and help improve the products they create.The fundamental problem with corporate America is that it no longer makes any sense. The CEO, the most powerful and influential person at the company, is now a figurehead who receives all the benefits of a company's success without being endangered by any of its failures.<a href="https://www.businessinsider.com/author/ed-zitron" rel="">Ed Zitron</a> is the CEO of <a href="https://www.ezpr.com/" target="_blank" rel="nofollow noopener">EZPR</a>, a national tech and business public-relations agency. He is also the author of the tech and culture newsletter <a href="https://ez.substack.com/" target="_blank" rel="nofollow noopener">Where's Your Ed At</a>.

Silicon Valley needs to stop laying off workers and start firing CEOs

At 19, I left my job to build a billion-dollar company. But I didn't do it, and considered myself a failure for years until I made a critical change in my thinking

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