Today, investors in Hertz (OTCMKTS:HTZGQ) and HTZGQ stock are seeing impressive gains of more than 20% at the time of writing. Indeed, it appears this beaten-up stock is receiving a new lease on life.
Hertz has become a battleground stock for many retail and institutional investors over the past year. Indeed, any stock that goes into bankruptcy proceedings begins to act similar to an option. Accordingly, the potential upside from a restructuring and subsequent emergence from bankruptcy holds appeal for investors.
With that in mind, many on Wall Street have raced to get in before a boom.
A recent announcement that Hertz could be exiting bankruptcy as soon as the end of June — just two days from now — has prompted some serious buying pressure in this stock today. Let’s dive into the details a bit more for investors interested in HTZGQ stock.
HTZGQ Stock on the Move Ahead of Bankruptcy Exit
Today’s massive move in HTZGQ stock reflects bullish sentiment on Hertz’s outlook moving forward. The rental car company saw revenues and earnings take a massive hit due to the pandemic. Indeed, as one of the companies with the most leverage to travel, investors in Hertz stock saw this company go from pre-pandemic levels around $15 per share to nearly 40 cents.
Today, Hertz is back to trading above $8 per share, making up a majority of its losses due to the pandemic. A court ruling has confirmed Hertz’s reorganization plan, meaning it is on track to exit bankruptcy by June 30, or approximately 13 months after it filed for bankruptcy.
The reorganization plan will wipe approximately $5 billion of debt from Hertz’s balance sheet. It will also provide more than $2.2 billion in liquidity. Thus, investors banking on a resurgence in the travel and tourism space have reason to like this recovery play today.
That said, as with all pandemic recovery plays, HTZGQ stock is a relatively high-risk play. Investors are banking on everything going right for this rental car company. Any inkling of a stumble, and downside risk could prevail over bullish market sentiment. This will certainly be an interesting stock to watch from here.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.