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Before there was GameStop, there was Hertz: a pandemic-battered legacy brand seemingly destined for the scrapheap that became inexplicably beloved by the day-trading hordes. Of course, no two situations are perfectly analogous, and there were some key differences here, namely that unlike GameStop, there was no particularly good reason to believe that Hertz was anything but doomed. It had no inspiring investor with a turnaround plan, was about to be delisted from the New York Stock Exchange and, oh yea, was bankrupt. But the people running Hertz did have the gumption to do what GameStop’s leaders did not, which was to throw their hands into the air and say, “You wanna buy this stock? Here, have as much of it as you’d like.”

In doing so, of course, Hertz did have to mention that the stock people were eagerly buying at about $2 apiece would eventually be worth almost exactly the same amount less once the bankruptcy sorted itself out, which is why the SEC politely requested it stop selling them. That means today those apparently illiterate investors are only out $29 million instead of $500 million.

Under Hertz’s restructuring proposal, shareholders will receive no distribution, meaning they will receive no recovery from the proposed deal…. In the trading session following Hertz’s filing for bankruptcy protection, shares crashed to 56 cents. They then surged above $5.50 less than two weeks later—a nearly 900% rally. In the days after, however, shares tumbled. They have since largely traded below $2 this year before finally sliding below $1 Wednesday.

Which, it should be said, is still 66 cents too high oh forget it some people can’t be reached or reasoned with. So let’s check in on someone who apparently can.

Melvin Capital, which previously had a large bet against the video game retailer, saw a return of 21.7% in February, according to the sources. The fund declined by 53% in January during the dramatic short squeeze that sent GameStop and other stocks soaring.

That’s nice for Steve Cohen and Ken Griffin. Anyway, while we’re doing a GME “where are they now,” where are the folks who gave us the GameStop (and Hertz) rally stories in the first place? Why, in a most appropriately-named place.

Shares of Rocket Companies… came under pressure after soaring more than 70% Tuesday for its best day ever with no apparent news. Rocket is one of the most heavily shorted names by hedge funds, with nearly 40% of its available shares sold short, which may have made it attractive to the Reddit trading crowd.

What a time to be alive.

Hertz Stock Nosedives as Bankruptcy-Exit Plan Threatens to Wipe Out Holders [WSJ]
Melvin Capital posts return of more than 20% in February, sources say [CNBC]
Shares of Rocket Companies drop 30% after a 70% irrational pop in the heavily shorted name [CNBC]



What, No One Wants To Trade A Hertz Pink Sheet?

That NYSE listing is apparently worth several dollars a share to a stock that’s only worth several dollars a share.


Hertz Would Like To Sell You Half A Billion Worth Of Worthless Stock

Behold, the most amazing regulatory filing in the history of stupid capitalism.


Hertz Celebrates Re-IPO Day In Court

Perhaps having paying customers arrested is not a good basis for a $29 per share valuation?


Ken Griffin, Steve Cohen Not Enjoying This Game. Stop.

This is getting very expensive, very, very quickly.

gamestop 3

Goofballs Still Burning Melvin Capital, Et. Al.

GameStop may not be selling weed or ice cream or dog food, but it and its ilk are certainly selling a lot of stock.


Gabe Plotkin Wants A Mulligan

And he’d like the people half of whose money he’s lost to pay for it.