Car-Rental Giant Hertz Falls 9.5% in Market Return
(Bloomberg) -- Hertz Global Holdings Inc., the car-rental giant that became a darling of meme-stock traders after it filed for bankruptcy last year, opened down 9.5% in its first day of trading after raising $1.3 billion in an initial public offering.
The Estero, Florida-based car-rental company opened at $26.25 after pricing 44.5 million shares at $29 apiece Monday. The stock was trading at $27.71 at 12:20 p.m. in New York. Its backers increased the offering size after initially planning to sell 37.1 million shares at $25 to $29, according to filings with the U.S. Securities and Exchange Commission.
The debut marks a striking turnaround around for Hertz, which traces its roots to 1918 and today has thousands of locations around the world under the Hertz, Dollar and Thrifty brands. The company was forced to file for bankruptcy in early 2020, after the Covid-19 pandemic sapped demand for rentals. It emerged from Chapter 11 about five months ago under the ownership of a group that includes Knighthead Capital Management, Certares Management and Apollo Global Management Inc.
The company’s shares, which continued to trade over the counter during its bankruptcy, also became favorites for amateur traders that made wild speculative bets during lockdowns.
The deal with Tesla Inc. is about meeting customer demands and preparing for the future, according to Mark Fields, interim chief executive officer.
“This is not only a turnaround, this is a transformation of Hertz,” he said in an interview Tuesday with Bloomberg TV. “In business you have to start looking around the corner.”
For the car-rental business, he said that includes electrification, shared mobility and connected cars. Hertz wants to be out front of those trends.
“That first-mover advantage of learning how to manage these large electrified fleets I think is going to give us a very big competitive advantage,” Fields said.
Goldman Sachs Group Inc., JPMorgan Chase & Co. and Morgan Stanley advised Hertz on the listing. Its shares are trading on the Nasdaq Global Select Market under the symbol HTZ.
©2021 Bloomberg L.P.