Hertz Stock (HTZZ): Is It a Good Buy Right Now?
Although Hertz might not be the largest rental car fleet holder in the country, it’s an iconic name in the rental industry. People are familiar with the company’s yellow and black representative colors.
However, the company filed for bankruptcy in May 2020, devastated by the lack of travel during the COVID-19 pandemic. Hertz failed to pay $400 million to lenders immediately before declaring bankruptcy.
Owing to this, the company’s shares in the stock market plummeted, coming down to only 40 cents in May 2020. However, something happened that surprised even some experts: the rental car company’s shares soared to $6 in the first week of June.
Seeing this spike, Hertz tried to capitalize on the opportunity by announcing the company will offer $500 million in stock. However, the shares could be worthless for the investors, since the bondholders get paid first when a company is bankrupt.
Later, this deal went off the table, gaining Hertz criticism from the SEC.
By the end of the year, Hertz tried selling more than 180,000 cars to pay the creditors a hefty $650 million in debts. Considering these fluctuations in the Hertz stock, it’s worth asking whether it’s an excellent stock to buy or not. Here we’ll discuss this in detail.
What Is Hertz?
Hertz is an American rental car company that has been operational since 1918.
Being an icon in the rental industry, the company has survived many dire economic situations, including the temporary auto production halt during the second world war, oil price shocks and even the Great Depression.
So it came as a surprise when the company filed for bankruptcy at the advent of the pandemic, issuing the following statement: “The impact of COVID-19 on travel demand was sudden and dramatic, causing an abrupt decline in the company’s revenue and future bookings.”
However, the share price rose when travel activities resumed, making many investors wonder if the Hertz stock is worth buying.
How Much Is It Worth?
The Hertz stock was worth $15.09 on August 20, 2020, rising 0.53% from the previous close of $15.01. The company has a market capitalization of over $7.1 billion.
Is It Safe?
Buying the Hertz stock might not be the safest bet since there’s still uncertainty around the company’s shares. In fact, a Forbes expert says that the pandemic was not solely responsible for the company’s decline, as it was already in poor shape due to its mounting debt.
It might not be safe to invest in a company with such a volatile history.
How and Where To Buy
Like any other stock, you have to sign up for a trading platform to purchase Hertz stock. Fill in the required details to create your brokerage account and buy the number of shares you want. The company’s ticker is HTZZ.
Is It a Good Investment?
Some experts call the Hertz stock “a dead man walking” since there’s a probability that the shares may become worthless even though they have some value now.
Due to its unpredictability and volatility, you may want to think carefully about a Hertz stock investment.
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- CNBC. 2020. "Why Hertz Landed in Bankruptcy Court When Its Rivals Didn’t."
- CNBC. 2020. "Bankrupt Hertz Terminates Controversial Stock Sale."
- CNN. 2020. "Hertz Files for Bankruptcy."
- Yahoo Finance. "Hertz Global Holdings Inc. (HTZZ)."
- Forbes. 2020. "How Hertz Fooled Amateur Investors."
- Finder.com. "How To Buy Hertz Global Stock - (Pink: HTZGG)."
