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Hertz shares fall after “Re-IPO” share offer

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A Hertz car rental desk at Fort Lauderdale-Hollywood International Airport. Hertz shares are now traded on the Nasdaq.

Joe Raedle / Getty Images

Hertz Global Holdings

makes a dis -pointing debut on Nasdaq.

Shares fell 9.8% to $ 26.17 on Tuesday after the company increased the volume of its stock offering in its so-called “re-IPO” on Monday.

Hertz stock (ticker: HTZ), which switched from Pink Sheets to Nasdaq on Tuesday, was hit hard in early afternoon trading and never recovered.

Hertz valued 44.52 million shares at $ 29, at the high end of the $ 25-29 per share range as the offering increased from 37.1 million shares. The price was at a discount from Hertz’s closing price of $ 32.62 on Pink Sheets Monday. Hertz’s Warrants (HTZWW) traded at $ 19.10 during the session, down 8%.

Nasdaq debut is dis -pointing as Hertz shares trade below the offer price. Tom Brady, the new Hertz spokesperson who  -pears on Hertz ads matching the company’s latest move to purchase 100,000 Tesla vehicles, tweeted “To the Mooooon” this morning about the deal ahead of the Nasdaq listing.

While Hertz stock has not been trading well on Tuesday, the deal illustrates the improvement in Hertz’s financial health since the June 30 bankruptcy. None of the shares were sold by the company – all were sold by existing owners. The company is now valued at $ 13 billion.

Hertz planned to buy 10.3 million shares in the offering for $ 300 million, which amounts to a share buyback.

The public free float in Hertz shares will increase significantly as a result of the share offering. Until the offer, only about 3% of the 473 million Hertz shares were publicly tradable. Those 14 million shares were issued to former Hertz shareholders as part of the bankruptcy restructuring package.

The remainder of the shares, which were sold primarily to institutional investors, were restricted under Rule 144 of the Securities and Exchange Commission and traded between institutions on Wall Street trading desks.

Assuming the underwriters exercise the over-allotment option of 6.7 million shares, Hertz’s IPO will increase to around 55 million shares, still just over 10% of the shares outstanding. Significantly more shares will be activated at the end of December, on the six-month anniversary of Hertz’s bankruptcy.

The deal limits Hertz’s successful emergence from bankruptcy. The company sold equity to investors at $ 10 per share as part of the restructuring.

Hertz and Rival

Avis budget group

(CAR), whose shares have risen sharply recently, is benefiting from the good conditions on the US rental car market.

Hertz reported record results for the third quarter, including adjusted earnings before interest, taxes, depreciation and amortization (Ebitda) of $ 860 million, while Ebitda was projected to be between $ 2 billion and $ 2.1 billion in 2021, up from $ 649 million Dollars in 2019. 6.7% at $ 273.33 on Tuesday and is up 60% since the company’s third quarter earnings report last week.

Hertz has unveiled a $ 4 billion deal to buy 100,000 Tesla vehicles, an agreement to make Tesla available

Uber technologies

(UBER) drivers and a deal to sell some of their used cars

Carvana

(CVNA). Hertz said it expects the Tesla to ship by the end of 2022, however

Tesla

(TSLA) has questioned this point in time.

Prior to the stock offering, Hertz sat at $ 1.2 billion in net cash, excluding about $ 7 billion in asset-backed securities. Hertz plans to make an offer to buy back 9% preference shares for 1.5 billion by the end of the year

 -ollo Global Management

( -O). This special price can be redeemed with a surcharge of 30%.

Write to Andrew Bary at [email protected]

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