Hertz Global Holdings Inc (HTZ)

[Iriule]

THE FED WON'T BAILOUT HTZ - here's why...

The Fed will not bail out Hertz. That's just fact. It can't bail out any insolvent company since 1933 and, since 2015, it cannot bail out any company in an "ad-hoc" bailout - per reuters

Now, the Treasury, being part of the Executive branch, can do whatever it wants. It could, for example, help reorganize Hertz, the way it did with GM and Chrysler in 2009. However, as in the case of the automakers reorgs, existing stockholders would likely be wiped out. USA-Today has a good summary of how old GM (they got nothing) and new GM stockholders fared. The stock you are buying now is "old HTZ", new HTZ stock won't be sold till after the reorganization is completed.

Likely the stock price will head back to $1 or so in a few days, and then down to about zero at or after the point it is delisted. There might be some ups among the downs, but eventually "the music will stop", by which I mean long-side speculators will decide to take profits or cut losses, and without their demand, the stock price will fall, as it has no ostensible potential to generate cash flows.

DISCLOSURE: Yes, I am SHORT at $4.04 from this morning

Kind regards,
Iain R