Key Takeaways Shares of Hertz plummeted 41% to $3.00 on Wednesday following a sharp reduction in second-quarter adjusted EBITDA expectations to $50M–$80M Deteriorating used-vehicle market con
Hertz (HTZ) experienced its most devastating trading session on record Wednesday, with shares collapsing 41% to close at $3.00. The unprecedented decline came after the rental car company issued a disappointing earnings preview and unveiled plans to raise hundreds of millions in fresh capital.
Hertz Global Holdings, Inc., HTZ
Management revealed that second-quarter adjusted corporate EBITDA would likely land between $50 million and $80 million. This figure sits at the bottom of the company’s earlier projections.
The primary driver? Unexpected weakness in the pre-owned vehicle marketplace. Hertz disclosed that deteriorating conditions in May erased gains achieved through April vehicle disposals, resulting in elevated depreciation expenses.
Monthly net depreciation per vehicle — representing the value decline of each rental unit over thirty days — is projected to reach approximately $300 for the second quarter. Just weeks ago, management had indicated this metric would come in substantially lower.
In response to these pressures, Hertz initiated two simultaneous financing transactions. The first involves $100 million in common equity. The second consists of $300 million in payment-in-kind (PIK) exchangeable notes, subsequently expanded to $350 million at 6.75% interest, maturing in 2030.
The company priced 37,037,037 common shares at $2.70 per share on June 25, lending them to lead underwriter J.P. Morgan Securities. The investment bank will sell these borrowed shares, establish a short position to facilitate hedging for note purchasers, and later return equivalent shares to Hertz.
Hertz receives a minimal lending fee from the equity arrangement — but captures no direct cash proceeds from the share sale. Net proceeds from the notes transaction are anticipated to total roughly $339.5 million, potentially reaching $388 million if the overallotment option is fully exercised.
Management intends to deploy the capital to reduce outstanding balances on its revolving credit facility and support general corporate operations.
Wednesday’s collapse adds to an already punishing period for shareholders. HTZ has declined 28% since January and approximately 50% over the past year. During this same timeframe, the S&P Small Cap 600 — Hertz’s benchmark index — has advanced more than 19% and 34%, respectively.
The stock currently trades 54% beneath its 52-week peak of $7.97, reached in July 2025.
Hertz has dedicated the past year to operational improvements. The company modernized its vehicle fleet, implemented cost-reduction initiatives, and announced two partnerships with Uber in April to support autonomous taxi development — announcements that temporarily boosted the share price.
However, the turnaround has proven unstable. Shares received a temporary boost earlier this year when travel disruptions linked to a partial government shutdown increased rental demand, but those gains evaporated once TSA personnel received payment and air travel normalized.
The company’s 2020 Chapter 11 bankruptcy filing continues to cast a long shadow. Hertz entered bankruptcy protection as international travel evaporated and used-vehicle valuations plummeted. The company notably became an early meme stock phenomenon, with retail investors driving shares up 800% despite its bankruptcy status.
Hertz completed its restructuring in June 2021, generating over $1 billion in value for equity holders — an uncommon bankruptcy outcome.
Legal challenges persist. In January, the Supreme Court refused to review Hertz’s appeal of a lower court decision, leaving the company responsible for $270 million in interest obligations owed to bondholders who were repaid ahead of schedule during bankruptcy proceedings.
The latest analyst recommendation on HTZ is rated as Sell, with a $3.00 price target.
The post Hertz (HTZ) Stock Plunges 41% in Historic Single-Day Collapse appeared first on Blockonomi.
