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Monday, October 25, 2021

Hertz Stock Termed As Pink Sheet: Nothing Left For Investors

OTCMKTS: HTZ GQ trading as unlisted security. On 30th October NYSE kicked the Hertz stock from the NYSE by filing Form 25(SEC).

This is a clear hint that the value of Hertz stock is zero and everyone should decline to buy it.

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On November 3, the Hertz stock had a value of 91 cents/share. The symbol “HTZ” on the NYSE has no validity and is not trading anymore. Only speculative gamblers would want to buy such a worthless stock.

Hertz Stock: Completely Worthless

Currently, HTZ GQ has no value and is warped in the proceedings of Chapter 11. Once it emerges from this proceeding. even if it emerges, there will be nothing left for the stock shareholders.

Firstly, you can get more information on the bankruptcy proceedings on the Duff and Phelps website: Case No. 20-11218. It is stated on the site that hearings will take place in Bankruptcy Court(Federal) in Delaware in November.

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Secondly, after signing a DIP agreement with financing sources, the company declared its intention to fund the fleet on 15th October. But the debt consists of collateral on all of the company’s assets. There is also a bad sign regarding the DIP term sheet being confidential. There is thus no hope of warrants, rights offering, or other securities for the owners of the Hertz stock.

There is also a red flag regarding the loss of the company’s CAO who was replaced by an insider of the company.

Fourthly, the company filed its proceedings of Chapter 11 on 22nd May and a lengthy amount of time has passed by without an agreement with the creditors.

Nobody knows who will hold what equity once the company emerges from the proceedings.

For the above reasons and delisting of the stock, Hertz stock is now worth nothing.

Plan Of Action For Hertz Stock Owners

Once the current equity becomes worthless, the stock value will become lower. So don’t go for holding the Hertz stock any longer.

The value of the stock would not be zero even one day before HTZGQ delists and eliminates its shares. There will be activities of pushing up the stock and pawning it off.

On 16th October, there was an article by Barron’s which implied that the stock might be of some value. It was written post moving up of the Hertz stock due to DIP financing news.

However, there is no guarantee given by the creditors for providing some value to the stock owners, added Barron. By law, the Board of Directors has no obligation towards the interests of the common shareholders but towards the creditors. Preferred stock shareholders hold more rights than the common ones. 

Bond prices further confirm that the Hertz stock has no value. The Hertz bonds are currently trading at 37 cents – 39 cents to the dollar.

You can take a glimpse at the trading prices of the HTZGQ bonds by going to Morningstar’s bond site and typing “Hertz” into the search tool.

If you think of investing in these risky securities, notice that the trading price of these bonds is so low that the market thinks that the Hertz stock has become completely worthless.

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