Hertz bounced back from the pandemic faster than the time it took Elon Musk to change his mind about Bitcoin. In May 2020, Hertz filed for Chapter 11 bankruptcy. Last week, Hertz selected a group of investors, which includes Knighthead, Certares and Apollo, as its controlling group post-bankruptcy. Shareholders will receive a payout of $8 per share, higher than the closing stock price of $5.8 on Tuesday.
Hertz's turnaround comes as America moves to a full reopening and people are desperate to travel (just try renting a car in Hawaii) and used-car prices are soaring, due to a global semiconductor shortage. Typically when companies come out of bankruptcy, the equity value is worthless but Hertz's superhuman turnaround, which lead to a bidding war amongst investors, has handsomely rewarded the stock's bag holders.
Short Squeez Takeaway: It's sweet vengeance for a stock that was delisted from the New York Stock Exchange and exiled to the over-the-counter market. Hertz, like its older brother, Gamestop ($GME), has been a popular "meme stock" (a stock that becomes popular not because of Company performance but rather hype on social media platforms such as Reddit) but maybe its time the "sophisticated" investors such as Carl Icahn, take the retail investors seriously. (Carl Icahn sold his Hertz stock for 72 cents lmao)