Hertz Stock Soars 50%: This Is a Nightmare
Shares of Hertz (NYSE: HTZ), a vehicle rental company in the middle of bankruptcy, is soaring over 50% higher today. Hertz, which has filed for bankruptcy and has shares that will likely go to zero, wants permission from bankruptcy court to issue more shares to take advantage of the hugely speculative rise in the company's stock price since its bankruptcy filing. It's not April 1, is it?
There isn't a great way to describe this development other than to say that nobody thought Hertz stock would rise the way it has in recent weeks, including Carl Icahn, who had sold his 55 million shares, a roughly 39% stake, at a massive loss. Essentially, bankrupt stocks are forced to satisfy debt with their lenders before any value is handed down to common shareholders. Generally, common shareholders are left with nothing, and Hertz has a massive $19 billion pile of debt that must first be satisfied before common shareholders see a dime.
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Source Fool.com
