Hertz Moves Forward With First Ever Initial Bankruptcy Offering
Hertz Global Holdings Inc. (NYSE:HTZ) may have filed for bankruptcy, but it has not stopped fighting. On June 11, the beleaguered rental car company did the seemingly unthinkable: it petitioned the judge overseeing its bankruptcy proceedings to allow it to raise cash by selling off "246,775,008 shares of common stock through at-the-market transactions under Hertz's existing shelf registration." On June 12, Judge Mary Walrath gave Hertz the greenlight to raise up to $1 billion through equity sales.
Mere minutes after news of Judge Walrath's approval hit the newswire, Zero Hedge officially declared it the "World's First Initial Bankruptcy Offering." Such an "IBO" (if I may be so bold as to coin the term) is without precedent. If it succeeds as more than just a Ponzi scheme, it will carry financial markets into wholly uncharted waters. There may be dangers lurking on those stranger tides.
The sheer audacity of a company in the midst of bankruptcy proceedings attempting a stock offering left even the most seasoned financial analysts and market commentators stunned. Charley Grant, the Wall Street Journal's always-insightful stock market reporter, expressed this widely felt sentiment succinctly in a June 11 tweet: "My head hurts. A lot."
Read the full article
Yahoo Finance Published June 15, 2020.