Another in what I expect to be a slew of CV-fallout bankruptcies. Traders and friends, please be sure to assess bankruptcy risk before taking a position in industries hard-hit by CV. Obviously airlines and cruise lines, but also associate businesses, like hotels, auto rental, stores that have been forced to close, oil companies (XOM, CVX), and the banks funding them. --- Hertz Global Holdings Inc., the car-rental company founded with a dozen Ford Model Ts over a century ago, filed for bankruptcy late Friday after sweeping travel restrictions and the global economic collapse destroyed demand for its vehicles. The Chapter 11 filing in Delaware allows Hertz to keep operating while it devises a plan to pay creditors and turn around the business. The second-largest U.S car-rental-car company does not need debtor-in-possession financing for now, according to a person familiar with the matter, because it has more than $1 billion cash on hand... https://www.bloomberg.com/news/arti...ar-demand-vanishes?srnd=premium&sref=jjnfhs7c
lessons learnt : don't over invest / expand too much. don't borrow too much. In very simple english, don't be greedy. have huge current asset & liquid cash for emergency SARS in 2002 hardly caused any bankruptcy. Covid kills people and companies with low liquid cash. anyway, the sky should be clearer. river should be cleaner. and there should be less CO2 emission.
Still better than Argentina going bankrupt every 6 years or so. For any and all portfolio managers who manage public investments we should demand a public life-long track record that is publicly visible and request able. It is mystery to me how some of those guys can invest time and again in high risk sovereign debt credit and equities and get away with poor returns and complete losses time and again. Hedge fund and private equity investors are taking their own calculated risks but anyone who manages public pension assets should be forced to make their track records accessible to the public. I am not crying a river about Hertz, it was imho a crappy managed company. I feel empathy with investors who had no choice as those with fiduciary duty to such investors did not take their responsibilities seriously. How asset managers can hold companies like Hertz is something I will never understand. The writing on the wall was a long time ago if you track their equity price path. A quick look at institutional holdings at Bbg reveals to me that a lot of public retirement funds held this company in their portfolio. A shame. Good bye Thrifty and Dollar Renta car as well.
"Hertz’s woes are compounded by the complexity of its balance sheet, which includes more than $14billion of securitized debt. The proceeds from those securities finance purchases of vehicles that are then leased to Hertz in exchange for monthly payments that have risen as the value of cars fall." WTF?!? and a female was running the business + 10,000 layoffs last month. The firm's largest shareholder is billionaire investor Carl Icahn, who has a nearly 39 per cent ownership stake. "He sure went down the toilet on that ugly bitch"
Hertz provides a useful service to business travellers. It will make a comeback. Lots of U.S companies going to Chap 11 operates normally. It's transparent to customers.
I dont think 10,000 layoffs is transparent to customers. Still might be worth taking a punt on if it goes to $0.5
Maybe I can pick up at pennies on some of these bankrupt companies and wait for a recovery though Hertz may not be worth it
Most certainly all equity is wiped out. The company does not even have enough assets to satisfy its creditors.
The poor diversity hire never stood a chance. But im sure she made it out ok with millions for herself.