A group of stockholders of rental car giant Hertz forged ahead with plans Wednesday for a public offering of 37.1 million shares of stock.
The stock will be priced at a discount price of $25 to $29 per share. It’s trading in the upper $31 range after falling nearly 10% trading Wednesday. It jumped as high s $45.64 Tuesday, before falling and closing at $35.06 Tuesday. Hertz also announced it applied to be listed on the Nasdaq, plans to buy some of the shares, the company said in a release.
“Hertz will not receive any proceeds from the sale of shares by the selling stockholders,” the company said in a release. “Hertz expects to fund the Repurchase with cash on hand. The Repurchase is subject to completion of the offering and the satisfaction of other customary conditions.”
The rental car giant plans to buy between $250 million and $500 million in shares, depending on a variety of factors, which would account for about a third of the new offering, using cash on hand, the company said.
Hertz applied to list on the Nasdaq Global Select Market under the ticker symbol “HTZ.” Hertz’s common stock currently trades on the over-the-counter market under the symbol “HTZZ.” It was previously listed on the New York Stock Exchange but was delisted due to its bankruptcy filing in 2020.
On the comeback trail
The new offering comes less than six months after the rental car company emerged from a nearly yearlong bankruptcy process. It filed Chapter 11 after it could no longer operate effectively during the pandemic, when travel basically stopped for months on end and was slow to restart, cutting demand for rental cars to basically nil.
The company’s been in the spotlight for much of the past month, starting with its initial Securities and Exchange Commission filing about the stock offering which followed the naming of former Ford CEO Mark Fields as interim CEO in early October. The company exited bankruptcy in June.
Many wondered what Fields’ impact would be on the company. Well, part of it was to manage the shareholders sale of stock and the move to a more mainstream stock exchange.
However, the company also forged a new deal with NFL superstar Tom Brady to promote the company and its coming fleet of Tesla Model 3 sedans for rental — most likely. Tesla CEO Elon Musk took to Twitter Monday evening to let everyone know that no deal has been signed and Hertz will pay the price as everyone else for their vehicles.
Hertz inked deals with Uber and Carvana designed to expand the renter pool for its expanding fleet of EVs and make it easier to divest vehicles it no longer needs. Hertz plans to buy 100,000 Teslas for its rental fleet in 2022.
Hertz and Uber fashioned an agreement allowing Uber drivers to rent Teslas starting Nov. 1. The rental car company plans to make 50,000 of the 100,000 Teslas it’s planning to purchase next year, available to Uber drivers by 2023.
Drivers in Los Angeles, San Francisco, San Diego and Washington, D.C. will get first crack at the program, which is expected to available nationwide sometime next year. One of the complaints about Uber and ride-hailing services in general is they are a drain on the environment — this should help change that, officials believe.
Carvana just completed a pilot program where the rental car company used Carvana’s network to sell vehicles no longer needed for its rental fleet.
The deal permits Hertz to use Carvana’s “online transaction technology and logistics network to expand vehicle disposition channels” to sell its vehicles. Previously, the company used auctions, partnerships with dealers and its own Hertz Car Sales locations to move these vehicles on to their next owners.
While it has 68 of its own sales locations, using Carvana will expedite the sale of vehicles.