Hertz investors file to sell up to $ 1.2 billion in days after Tesla soar

Top line

The recently bankrupt car rental company Hertz has alerted regulators that it wants to sell up to $ 1.2 billion of existing shares to the public, giving some of the firm’s largest institutional shareholders l opportunity to capitalize on skyrocketing stocks following a high-profile deal with Tesla.

Highlights

In a regulatory brief released Wednesday, Hertz revealed that major shareholders were looking to sell 37.1 million shares at a price of between $ 25 and $ 29 per share.

Hertz said he will not receive any proceeds from the sale and instead listed a dozen institutional investors who will sell shares, including major shareholder CK Amarillo, as well as Cougar Capital investment firms, Diameter Capital, Eaton Vance and Fortress.

In the filing, Hertz reiterated that it has placed an “initial order” for 100,000 Tesla Model 3 vehicles, representing approximately 22% of its global fleet, as part of its plan to offer the largest electric vehicle fleet in North America. North, a massive order. that Tesla chief Elon Musk questioned when he said a contract had yet to be signed on Monday evening.

Hertz shares, which have climbed 42% and added nearly $ 5 billion in market value since Tesla’s announcement last Monday, fell 4% in pre-market trading.

Hertz, who did not immediately respond to Forbes’ request for comment, also revealed plans to repurchase between $ 250 million and $ 500 million of its own shares.

Key context

The massive sale of Hertz shares comes about a week after the company said it would call on Tesla to help turn around its struggling business. The company filed for bankruptcy last May as the Covid-19 pandemic struck a blow to demand in the leisure industry, and in June the company emerged from bankruptcy after losing more than 5 billion dollars in debt, in part thanks to a new group of investors. Knighthead Capital and Centares, which together form CK Amarillo, headed the investor group and will still have a roughly 38% stake in the company after the stock sale was announced on Wednesday.

Large number

$ 16.5 billion. This is Hertz’s market cap as of Tuesday’s market close.

Tangent

Tesla shares have also skyrocketed after the deal last week, climbing nearly 33% since last Monday. The surge has helped make the 21-year-old automaker more valuable than social media giant Facebook and has even propelled the S&P 500 and Nasdaq, both of which count the automaker among its main constituents, to new heights. over the past week.

Further reading

Hertz claims Tesla deliveries started after Elon Musk says contract was unsigned (Forbes)

Tesla surpasses $ 1 trillion in market value after Hertz places biggest electric vehicle order ever (Forbes)

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