On November 29, 2021, Hertz (NASDAQ: HTZWW) set forth its plan to join almost 300 other companies in repurchasing stocks. With a history tracing back to 1918, Hertz is one of the largest vehicle rental companies in the world. By 2013, it was offering automobiles at almost 10,300 locations worldwide.
In early 2020, Hertz had filed for bankruptcy in the first months of the COVID-19, which shrunk the company’s earnings. Hertz lost almost $1.7 billion in 2020; only a tad higher than their already prevailing losses before the pandemic struck the market. The company had to make cutbacks and close off locations; selling as many as 200,000 vehicles. But, the company remained resilient.
Hertz had a surefire plan to leave bankruptcy behind. In March 2021, an official statement revealed that two investment firms - Knighthead Capital Management & Certares Opportunities had agreed to invest in the company. Hertz’s corporate debt was hammered down by almost 80%.
Another action was the selling of one of its subsidiaries, Donlen Corporation to Athene Holding Ltd. (NYSE: ATH), for a value of approximately $900 million. By June 30, 2021, Hertz waved goodbye to its bankruptcy phase.
In its financial report for Q3 of 2021, the company reported revenues of $2.2 billion and net income of $605 million. Swiftly, Hertz reported that it was planning to add electric vehicles to its plethora of products, placing an order for 100,000 vehicles from Tesla Inc. (NASDAQ: TSLA). Mark Fields, Hertz’s Interim CEO said, “This is not only a turnaround, this is a transformation of Hertz.” That day, the price of $HTZ closed at $35.06. It is surmisable that this propelled $TSLA further, increasing its M.Cap to $1 Trillion.
Elon Musk, Tesla’s CEO, later made a contradictory statement on November 2, 2021, saying that no deal had been signed between Hertz and Tesla as of yet. Hertz responded by saying that the supply of Tesla’s Cars had already begun.
Feather in the Cap
Moving forward, Hertz Global Holdings Inc. (NASDAQ: HTZ) announced a $2.0 billion share repurchase program on November 29, 2021. No doubt, this is another feather in the cap for the company post it’s exit from bankruptcy. The result came when, the next day, the share price of $HTZ increased by 6%. The company added that the buyback will take effect immediately,
Recently, evidence shows that stocks affiliated with electric cars have surged. Hertz’s addition of EV to its product range, along with the buyback scheme, are bullish signals. The almost 100-year-old company has come back from the dead and is here to stay for a long, and brighter future ahead.