Hertz Global Holdings Inc., the car rental company, was delisted last year by the NYSE after rentals plunged at the start of the COVID-19 pandemic, pushing the company into bankruptcy protection. Now, Hertz's fortunes are changing. The company this week listed its shares on the Nasdaq under the ticker (HTZ) just as the car rental industry is rebounding amid increasing demand.
- In an upsized public offering this week, Hertz Global Holdings shareholders sold 44.5 million shares.
- Hertz shares began trading on Nov. 9, 2021 on the Nasdaq Global Select Market under the ticker (HTZ).
- Hertz had been traded over-the-counter (OTC) markets as HTZZ since its emergence from bankruptcy earlier this year.
- Hertz did not receive any proceeds from the sale and said it would repurchase 10.3 million shares having an aggregate purchase price of $300 million.
In the upsized public offering, some shareholders of Hertz Global Holdings sold their positions on Nov. 9, 2021 on the Nasdaq Global Select Market. The sale, amounting to 44.5 million shares, was set at a share price of $29 per share. Goldman Sachs Group Inc. (GS), JP Morgan Chase & Co. (JPM), and Morgan Stanley (MS) advised on the listing.
Hertz will not receive any of the proceeds from the sale and plans to repurchase 10.3 million shares worth, in total, $300 million. The sale valued the company at $13.7 billion.
Hertz's First Day on Nasdaq
Hertz started trading on the Nasdaq Global Select Market on Nov. 9. The stock opened lower than the offer price of $29 at $26.25, reaching a high of $28 during the day before closing at $26.17. The stock's intraday low was $25.40 and a total of 27 million shares changed hands on the first day of trading. Some of the shareholders offering their shares were Cougar Capital and Oaktree Capital Management.
Hertz's outstanding warrants also were expected to start trading under the ticker (HTZWW) on Nov. 9. The closing date for the offer is Nov. 12, 2021.
Hertz's Plunge into Bankruptcy
After filing for bankruptcy in May 2020, the company, which is more than a 100 years old, was delisted in October 2020 by the NYSE. The Florida-based car rental company entered 2020 with high debt due to corporate acquisitions, a high vehicle inventory, and $1 billion in cash. The company realized significant losses in 2020 as the rental car industry plummeted due to travel bans during the pandemic. It emerged from bankruptcy on June 30, 2021, to begin trading over the counter (OTC) as HTZZ on July 1, 2021.
Electric Vehicles are Key to Hertz's Growth
Hertz has been seeking to enter the electric rental car business in order to ramp up its revenues. Along with its plans to list on the Nasdaq, Hertz has been in talks with Tesla Inc. (TSLA) and Uber Technologies Inc. (UBER). The company plans to increase its EV holdings to 20% of its global fleet and recently announced plans to acquire 100,000 electric vehicles from Tesla. The delivery is expected around late 2022. Hertz also plans to rent 50,000 electric vehicles to Uber.
Through this partnership, Hertz plans to penetrate the EV rental car market in select states. Hertz's expansion plans in the EV market also include vehicle acquisition and charging stations in the US and Europe. According to Hertz interim chief executive officer (CEO) Mark Fields, the former CEO of Ford, the Tesla deal will be central to Hertz's strategy of EV adoption in the rental car segment.
There's no guarantee, in fact, that Hertz will be able to expand its EV offerings by purchasing from Tesla. That's because Hertz's recent announcement about the deal has not been confirmed by Tesla CEO Elon Musk. “If any of this is based on Hertz, I’d like to emphasize that no contract has been signed yet,” Musk said in early November. “Tesla has far more demand than production, therefore we will only sell cars to Hertz for the same margin as to consumers. Hertz deal has zero effect on our economics.”