Shares in Hertz declined 10% in Thursday trading after the company terminated its share offering for $500 million. The reason for the retrieval of the stock sale is the Securities and Exchange Commission’s disapproval of the deal.
After the company announced bankruptcy, the shares in Hertz enjoyed a strong rally last month. To make the most out of this situation, the car rental company decided to sell its stock for about $500 million. Last week, the bankruptcy court granted Hertz approval for the stock sale.
Many believed that selling Hertz’s stock should not be allowed as shares in the company could end up being worthless. On Thursday, it was announced that the finance committee of the board of directors decided that it will be for the best if Hertz terminates the stock sale.
After the rental car company canceled its stock sale, it is in talks with top lenders to secure financial aid. It is said that the bankruptcy loan could be up to $1 billion.
The news about the termination of the stock sale brought a decline in shares in Thursday trading. The interest in the stock, however, was lost even hours before the announcement. While there was a brief recovery, the Hertz stock closed lower, declining 10% to $1.80. This is the lowest closing price for the stock since June 4.
Hertz filed for bankruptcy on May 22 after the rental car business was suffering due to the low demand during the stay-at-home period. Following the news, on May 26, the stock hit a one-day low of 40 cents. A few days later, however, the stock began to surge, reaching $6 per share.
Analyst stock price forecast and recommendation
According to CNN Money, 2 analysts offering 12-month price forecasts for Hertz Global Holdings Inc. have a median target of $3.26, with a high estimate of $3.51 and a low estimate of $3.00. The median estimate represents a +80.33% increase from the last price of $1.81.
The same media also offers the recommendations of 5 investment analysts who have a consensus rating of “Hold” for Hertz Global Holdings Inc. Out of the 5 polled analysts, 4 ranked the company’s stock as “Hold” and 1 – as “Sell”.