Normally, companies declare bankruptcy, their stocks plummet and shareholders get wiped out. But car rental company Hertz (NYSE:HTZ) refused to go out like that. More specifically, speculators betting on an impossible turnaround refused to let Hertz stock go out without a bang.

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In the weeks after Hertz filed for bankruptcy in late May, Hertz stock dropped from $3 to 50 cents, rebounded to $1.30, briefly soared above $5, quickly collapsed back to $1, and has since stabilized around the $1.50 level.

Why all the volatility? Pure speculation. Nothing more.

What comes next? Exactly what Morgan Stanley (NYSE:MS) says will come next. A $0 price tag for Hertz stock.

That’s right. All this volatility surrounding the Hertz bankruptcy and Hertz stock is just noise. In the big picture, the stock is worthless, and equity shareholders will — like in almost every bankruptcy case — get wiped out.

Here’s why.

Hertz Stock: How Did We Get Here?

The story surrounding the Hertz bankruptcy is a bit wild. Bear with me.

First, Hertz — burdened by a debt-heavy balance sheet and collapsing sales trends amid the Covid-19 pandemic — declared bankruptcy in late May. Hertz stock fell from $3 to 50 cents.

Then, fueled probably by some combination of low interest rates and a rise in retail investor interest in the stock market, speculators pushed Hertz stock higher. By early June, the stock was trading north of $1.50.

Then, in an attempt to take advantage of the inflated stock price, Hertz management flirted with the idea of issuing equity at these elevated prices in order to finance their bankruptcy dealings. On that news, Hertz stock exploded to $5+ prices.

But that move raised eyebrows. Particularly over at the SEC. Because Hertz was essentially issuing worthless stock to equity investors in order to pay off their own debts.

A few weeks later, Hertz management scrapped that idea. Hertz stock plunged. Back to $1.

Shares have since recovered and stabilized on news that the company is seeking a bankruptcy loan from a group of Wall Street bankers and hedge fund managers. Such a loan would help the company navigate the bankruptcy process, and potentially preserve equity value.

Hertz Is Worthless

If you do the math here, it becomes clear that all the volatility in Hertz over the past six weeks is nothing more than noise, and that the stock is, indeed, essentially worthless.

As of last quarter, Hertz had more than $18.75 billion in debt on its balance sheet. The company says it has more than $850 million in cash to work through the initial stages of bankruptcy dealings. Hertz is also trying to raise an additional $1 billion from hedge fund managers and Wall Street bankers.

If Hertz does raise that money, then the company will have a cash balance of $1.85 billion, against a debt balance of $18.75 billion. That $16.9 billion delta is simply too big to say Hertz stock is worth much of anything today.

Potential downside catalysts on the horizon include an NYSE de-listing and/or significant shareholder dilution. If either of those things happen, the market will be reminded in a not-so-subtle fashion that there really isn’t much — if any — equity value here.

That rude reminder will cause Hertz stock to plunge. Potentially all the way to zero dollars.

Bottom Line on HTZ Stock

Just be smart here. Why would you invest in a bankrupt company with a $16.9+ billion net debt balance in the middle of a pandemic?

Sure, miracles do happen. And there is a small chance here that, if the stars align, HTZ stock is worth something. But not much. And the odds of that happening are so small — while the odds of hitting zero are so high — that the stock is not worth the risk.

My parting words: proceed with caution.