What Happened?
Shares of global car rental company Hertz (NASDAQ: HTZ) jumped 3.6% in the pre market session after the company announced it was selling $375 million worth of senior notes in an upsized private offering.
The total amount of the offering was increased from the previously announced $250 million, signaling strong investor interest. Hertz planned to use $300 million of the money raised to pay back or repurchase some of its existing debt that was due in 2026. This move was seen as a way to improve the company's financial health by extending its debt deadlines. The new notes are due in 2030, giving the company more time to manage its finances.
After the initial pop the shares cooled down and closed the day at $7.03, up 0.5% from previous close.
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What Is The Market Telling Us
Hertz’s shares are extremely volatile and have had 64 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 7 days ago when the stock gained 6.6% on the news that investors scooped up equities, shaking off the initial concerns inferred from the Fed's dot plot, with tech stocks leading the charge. As a reminder, the Federal Reserve cut its benchmark interest rate by 25 basis points the previous day and signaled that more reductions could come before year-end and beyond. Initially when the cut was announced and Fed Chair Powell held his press conference, there was a pullback in the market as the Fed's "dot plot" revealed that only one cut was likely for 2026. This was below the three cuts that had been priced into the markets. This was the first interest rate cut of 2025, a move investors had widely anticipated. In response to the decision, stocks rose significantly, positioning major indexes like the S&P 500 and Nasdaq to open at record levels. The Fed's decision was influenced by signs of a weakening labor market. Lower interest rates are generally seen as positive for stocks because they reduce borrowing costs for businesses and make fixed-income investments like bonds less attractive by comparison, driving capital into the equity market. While Fed Chair Powell noted the path forward has risks, the prospect of looser monetary policy has fueled optimism on Wall Street.
Hertz is up 90.3% since the beginning of the year, but at $7.10 per share, it is still trading 17.9% below its 52-week high of $8.65 from April 2025. Investors who bought $1,000 worth of Hertz’s shares at the IPO in June 2021 would now be looking at an investment worth $263.06.
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