Hertz has emerged from bankruptcy. The original meme stock has surged more than 2,000% leading up to its exit from Chapter 11.
- Hertz shares climbed to 2.031% leading to its exit from bankruptcy.
- Hertz filed for Chapter 11 bankruptcy last year and was barred by the SEC from selling shares amid a surge in its share price.
- Hertz represented the original “same stock” as few were able to make sense of its epic rally last year amid bankruptcy proceedings.
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In the run-up to its exit from Chapter 11 bankruptcy on Wednesday, shares of Hertz Global jumped 2.031% from its March 4 low of $ 0.41.
In many ways, Hertz was the original “same stock” because few investors were able to make sense of its epic rally last year as the company faced both a deteriorating business due to the COVID-19 pandemic and bankruptcy proceedings. Months later, stocks like GameStop and AMC would see gravity-defying surges driven by retail investors, even if their underlying businesses lacked a solid foundation.
The stock has climbed more than 1,100% in just two weeks last year, and Hertz tried to capitalize on the move by selling new shares to raise funds. But the move was blocked by the SEC, which opposed the bankrupt company’s plan to sell new shares to investors.
Hertz finally received a $ 6 billion offer from Knighthead Capital Management, Certares Opportunities and Apollo Management to buy the company out of bankruptcy.
The deal gave Hertz an enterprise value of $ 7.43 billion and helped existing stock investors recover around $ 8 per share, which is rare given that stock holders are typically wiped out. during bankruptcy proceedings, because debt holders are the first to collect from the company.
Hertz investors received more than $ 1 billion in value from the bankruptcy exit, in the form of $ 239 million in cash and warrants for 18% of the reorganized company.
Hertz says it is now in a better position to capitalize on the post-pandemic travel boom with a much leaner balance sheet and lower debt load.
Hertz shares are currently trading over-the-counter under the ticker symbol “HTZGQ” and closed at $ 8.74 on Wednesday. The share will now trade under the ticker symbol “HTZZ”. Hertz is up 583% year-to-date.