Hertz Global Holdings Inc (OTCMKTS: HTZZ) stock price barely moved after the rental car company was rumoured to have ordered 100,000 new Teslas to expand its fleet.
The rental car company stock price kept trading below its recent highs despite today’s massive news.
One of the key reasons behind the muted reaction to the Tesla order could be that a significant portion of the company’s outstanding shares are currently locked up because they are owned by institutions that bailed the firm out of bankruptcy.
Hertz has 471 million shares in circulation, yet only 3% are currently available for trading. The rest of the shares (457 million) are locked up in line with SEC Rule 144 and could be available for trading starting December 30, 2021, when the lockup period expires.
The company recently announced its intention to issue $100 million in shares to boost its working capital with the shares sold during the capital raise coming from its existing shareholders. However, details of the capital raise remain scarce.
Hertz emerged out of bankruptcy in June following a $6 billion turnaround plan and is currently under the leadership of Mark Fields, a former Ford CEO, who was recently appointed as interim CEO.
Investors remained unmoved about today’s massive order, while Tesla’s shares price edged higher following the news.
Traders looking to open bullish positions in Hertz stock should remember the December deadline as the lockup period expires, which would bring a flood of the company’s shares into the market, potentially triggering a significant decline in its share price.
I would be looking to buy Hertz shares next once its stock price stabilises after the expiry of the lockup period.
*This is not investment advice. Always do your due diligence before making investment decisions.
Hertz stock price.
Hertz stock price barely moved premarket despite the positive announcements as they kept trading at $24.69.
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