Shares of Hertz Global Holdings collapsed 41% on Wednesday, closing at $3.00 — their largest single-day percentage decline on record — after the company warned that second-quarter earnings would land at the low end of guidance and announced two concurrent capital raises.
The car-rental giant now expects adjusted corporate EBITDA of $50 million to $80 million for Q2, falling short of the $79.11 million average analyst estimate, according to LSEG data. Hertz blamed unexpected weakness in the used-car market, which turned gains on vehicle sales in April into losses in May and drove net monthly depreciation per vehicle to approximately $300 — well above the level it had projected just a month earlier.
To shore up liquidity, Hertz launched a $100 million common stock offering and a $300 million exchangeable senior first-lien secured payment-in-kind (PIK) notes due 2030, which was later upsized to $350 million at 6.75%. The company priced 37,037,037 shares at $2.70 each on June 25, lending them to underwriter J.P. Morgan Securities so investors could hedge the note purchase. Hertz will receive only a nominal lending fee and no direct proceeds from the share sale, while net proceeds from the notes are expected at roughly $339.5 million (up to $388 million if the overallotment is exercised).
The selloff extends a painful stretch for HTZ, now down 28% year-to-date and nearly 50% over the past 12 months. Despite fleet refreshes, cost cuts, and an April partnership with Uber tied to robo-taxi ambitions, persistent pressures from the used-car market and legacy legal liabilities — including a $270 million interest-payment obligation from its 2020 bankruptcy — continue to weigh on investor sentiment.
