Yesterday was supposed to be a joyous one for Hertz and its owners: After a year-and-a-half of exile to the over-the-counter market, the company was to be allowed to sell shares again—and on a real stock exchange, no less, with nary a word of warning from Gary Gensler or anyone else. Expectations were high: The size of the offering was increased by 20%, and some Hertz shareholders demanded the princely sum of $29 per previously worthless share in order to part with them.
They didn’t get it.
After emerging from bankruptcy protection in June, the parent company for Hertz rental cars made its trading debut on the Nasdaq on Tuesday, falling by 9.8% to $26.17 a share.
Hertz Global Holdings, trading under the ticker symbol “HTZ,” fluctuated throughout the day between $25.40 and $28 a share. It failed to reach the $29 a share offering price by certain stockholders of the company – the high end of a previously targeted range.
Seems would-be buyers had perhaps seen the reports that Hertz (allegedly) makes a practice of having customers with fully-paid up rentals arrested for stealing them.
A bankruptcy court judge was set to hear arguments Thursday regarding claims filed by dozens of Hertz customers who say they were falsely arrested — and in some cases jailed — because the company reported the cars they had rented as stolen….
[James] Tolen said officers handcuffed him, then told him he was driving a stolen car…. Tolen begged the officers to look at his rental contract, in which he says he was listed as an authorized driver. He says after seeing the document, one of the officers called Hertz and told the company it needed to get a better system….
Another claimant is Philadelphia-area contractor John Ayoub, who rented a truck from Hertz in April 2019. He said he told Hertz agents it would be a long-term rental and was told to call each week to extend it, which he says he did…. But on May 28, Hertz filed a theft report, just four days after putting through a charge of $2,300, according to court documents. And even though the $2,300 showed as paid in Ayoub's bank account the next day, Hertz didn't pull that police report back, he said.
Hmmmm. Surely Hertz will have a good explanation for this, yes?
As to pulling back police reports once payment is made or the vehicle is returned, Hertz told The Philadelphia Inquirer last year that the reports were valid when they were filed and that "it's up to law enforcement to decide what to do with the case…."
In its defense, Hertz also claimed the attorneys representing the claimants "have a track record of making baseless claims that blatantly misrepresent the facts."
Nor are those (presumably former) clients the only ones with a bone to pick with Hertz in court. There’s the small matter of its creditors, who were told (and treated as if) Hertz’s stock was worthless.
Hertz Global Holdings Inc. bondholders argued the formerly bankrupt rental-car provider shouldn’t get to shower money on shareholders without paying roughly $270 million in bond premiums and interest stemming from its chapter 11 case.
Shares of Hertz fall 9.8% on first day of Nasdaq relisting [CNBC]
Dozens of customers allege Hertz had them falsely arrested over rental cars reported stolen: "It was just terrifying" [CBS News]
Hertz Bondholders Seek More Cash Amid Stock’s Comeback [WSJ]
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