Shareholders looking for long-term investment must be very alert and careful while they purchase Hertz stock since it is an extremely dicey move.
Hertz Global under (OTCMKTS: HTZGQ) is a business enterprise for vehicle rental. However, Hertz stock has been delisted from the NY Stock Exchange. As a result, they will not be able to trade on that platform any longer. On 29th October, the owner of NYSE, Intercontinental Exchange made a public statement regarding Hertz stock. They announced that the employees of the NY Stock Exchange Regulation have decided to suspend the trading permit and activities of Hertz Global Holdings Company. Following this suspension Hertz stock cannot trade on NYSE anymore.
The huge impact of the coronavirus pandemic on several sectors including leisure and travel is quite evident in the stock market figures. The sector of car rental is highly dependent and tied to the hips of the aviation industry. This is basically because people traveling by air also resort to renting cars to and from the airports. This number of passengers is considerably large and has been lacking due to the COVID-19 pandemic situation. Researchers have found out that the effect of the pandemic is massive on the entire industry of transportation, be it air, water, and roads.
Many analysts have stated that this pandemic is the main factor behind the bankruptcy of Hertz stock. Although the company paid a whopping $16 million as bonuses for retention to its executives on the very day of their bankruptcy. Nonetheless, various measures for cost-effectiveness had been taken owing to the losses. There was a massive hike in the number of lay-offs and clearance of assets that are not a core part of Hertz stock.
Hertz Global Company is based in Florida and it was founded over 100 years ago. Hertz, Thrifty, and Dollar are namely some of the brands under which they conduct their car rental business on a global scale. It has been emotionally and financially difficult for the investors to cope with the bankruptcy as well as the delisting of the company.
Steve Ford, an official of Advanced Applied Management Solutions has given some insights regarding the sudden decrease of Hertz stock. He says that the company had a loan of over $24 billion against a $1 billion cash reserve. This debt was mainly because of corporate and car acquisitions. Hertz lost all their revenue and credibility due to the COVID-19 pandemic and became bankrupt following the inability to pay off the debt.
However, the shareholders are first in line to claim the assets of Hertz stock. Although investors will not receive anything even after the bankruptcy issue is solved.
Carl Ichan, a renowned investor, sold his entire holding which was almost 39% of the total Hertz stock.
Presently, the company has a $1.05 EPS.
Hertz must not be considered by either long-term or short-term investors.