Hertz Global Holdings
made a disappointing debut on the Nasdaq.
Its shares fell 19.8% Tuesday to $ 26.17 after the company increased the size of its stock offering on Monday in what it called its âRe-IPOâ.
Hertz stocks (ticker: HTZ), which passed through the Pink Sheets’ Nasdaq on Tuesday, were hit hard in the early afternoon and never recovered.
Hertz valued 44.52 million shares at $ 29, at the high end of the $ 25 to $ 29 per share range, as the size of the offer has been increased from 37.1 million shares. The price was below Hertz’s closing price of $ 32.62 on the Pink Sheets on Monday. Hertz (HTZWW) warrants closed at $ 16.95, down 18.5%.
The Nasdaq’s start is disappointing, with Hertz shares trading below the offer price. Tom Brady, the new spokesperson for Hertz who appears in Hertz ads related to the company’s recent decision to buy 100,000 Tesla vehicles, tweeted “To the Mooooon” earlier this morning about the deal. before listing on Nasdaq.
While Hertz shares are not trading well so far on Tuesday, the deal illustrated the improvement in Hertz’s financial health since coming out of bankruptcy on June 30. None of the shares were sold by the company, all were sold by the existing holders. The company is now valued at $ 13 billion.
Hertz said he plans to buy 10.3 million shares of the offering for $ 300 million, which is equivalent to a share buyback.
The offering of shares will significantly increase the free float of Hertz shares. Until the offer, only about 3% of Hertz’s 473 million shares were available for public trading. These 14 million shares were issued to former Hertz shareholders as part of the bankruptcy restructuring plan.
The remainder of the shares sold primarily to institutional investors were restricted under Securities and Exchange Commission Rule 144 and were traded between institutions on Wall Street trading desks.
Assuming that underwriters exercise the 6.7 million share over-allotment option, Hertz’s free float will increase to approximately 55 million shares, or just over 10% of the outstanding shares. Many more shares will be released at the end of December, on the sixth anniversary of Hertz’s exit from bankruptcy.
The deal crowns what has been a successful exit from bankruptcy for Hertz. The company sold shares to investors as part of the restructuring at $ 10 per share.
Hertz and rival
Budget Opinion Group
(CAR), whose shares have surged recently, are benefiting from good conditions in the US rental car market.
Hertz reported record results for the third quarter, including $ 860 million in adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) while projecting $ 2 billion to $ 2.1 billion in EBITDA for 2021, up from $ 649 million in 2019. Avis stock was down 6.7%, to $ 273.33, on Tuesday and are up 60% since the company’s third-quarter earnings report last week.
Hertz unveiled a $ 4 billion deal to buy 100,000 Tesla vehicles, a deal to supply Teslas to
(UBER) and an agreement to sell some of its used cars to
(CVNA). Hertz said he plans to deliver the Tesla by the end of 2022, but
(TSLA) questioned this timeline.
Prior to the stock offering, Hertz had $ 1.2 billion in net cash, excluding $ 7 billion in asset-backed securities. Hertz plans to make an offer to buy back by year-end for $ 1.5 billion of 9% preferred shares held largely by funds managed by
Global management of Apollo
(APO). This favorite can be redeemed at a 30% premium.
Write to Andrew Bary at [email protected]