Judge rules that Hertz can sell $1 billion worth of new stock, dealing a blow to investors who gobbled up shares after its bankruptcy
Jun 13, 2020, 03:53 IST
- Hertz, the car-rental giant which filed for bankruptcy in May due to the coronavirus pandemic, can sell $1 billion in new stock to raise money, a judge ruled Friday, according to The Wall Street Journal.
- Hungry traders have gobbled up the stock since its bankruptcy, and the company's lawyers cited that volatility as a "unique opportunity" to shore up its coffers.
- After the Chapter 11 filing on May 22, shares of Hertz skyrocketed and the stock flew up Robinhood's list of most popular names. However, the newly issued stock will effectively devalue existing shares, sending the stock down in after-hours trading Friday.
- The company received a delisting notice from the New York Stock Exchange this week, which it plans to appeal in a bid to keep its shares trading.
- Hertz was also seeking to save money by cancelling leases on more than 144,00 vehicles, which could save it up to $80 million.
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