Why is HTZ stock surging today? Here is what you need to know – Idaho Reporter

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Why is HTZ stock surging today? Here is what you need to know

Is the stock market starting to go crazy? Seems like HTZ stock will be one of the most popular stocks with Robin Hood users today, again, because Hertz stock is up a massive 50% in pre-market period. The US car rental company Hertz (NYSE:HTZ) wants to use the current stock market phase and, despite the bankruptcy proceedings, issue new shares worth up to $ 1 billion. Obviously, there is a demand to complete this transaction, which is unique in history.

 

Although Hertz recently filed for bankruptcy, the stock has grown incredibly in the past few weeks. Earlier in the week, the stock rose temporarily to $ 6.25, making up 1,462 percent since the May 22nd low after the company filed for bankruptcy as a result of the US corona crisis.

The group now wants to ask a bankruptcy judge for permission to sell 246.8 million new shares to Jefferies. “The recent market prices and trading volumes of Hertz common stock may offer the company a unique opportunity to raise capital on more favorable terms than the loans that many other bankrupt companies receive,” said the company’s lawyers on Thursday.

 

Law professor Jared Ellias of the University of California Hastings College of Law said he had investigated hundreds of bankruptcies and had never seen a company try to fund bankruptcy with an equity offering at the beginning of Chapter 11. “Hertz looks at the market and realizes that there is a group of irrational traders who buy the stocks. The answer is to try to sell these people in the hope of funding part of the restructuring.” said Ellias.

After black Thursday, however, doubts are justified as to whether Hertz will get away with his plans. The previous day, the Hertz share price lost another 20 percent to around two dollars. To collect the targeted billion, the course would have to double again and it seems like HTZ is on a good way to do exactly that.

Hertz also said the company would ask the US bankruptcy court in Wilmington, Delaware, for permission to get out of leasing 144,372 vehicles – a move that the company said would save about $ 80.3 million a month. Last year Hertz’s US fleet peaked at 567,000 vehicles.

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