Options on Bankrupt Hertz Provide Unique Risks and Opportunities

The story at Hertz just gets more and more bizarre.

Yesterday we wrote about how millennial investors and sports gamblers might be playing a role in the extreme moves we’ve seen in the Rental Car Giant that recently filed for bankruptcy protection and almost right after that piece went up on, Hertz (HTZ) shares were halted amid news that they would be cancelling the sale of up to $500 million worth of equity shares primarily because of concerns raised by the SEC.

Hertz had been on the ropes even before the spread of Covid-19 and it was a poorly kept secret on the street that bondholders were bracing for a missed coupon payment as far back as the third quarter of 2019. The steep reduction in revenues that occurred starting in March as customers ceased almost all travel activities was really just the final nail in the coffin.


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