Hertz Hits a Speed Bump: A Jedi Master's Take on the Plunging Stock

A Great Disturbance in the Force... and the Stock Market

Hmm a disturbance I feel yes. Hertz shares plummeted they have. Down more than 20% early trading it was. A $250 million stock offering announced they did. Disappointing first quarter earnings the cause it seems. "Always two there are no more no less. A master and an apprentice." In this case the master being the market and the apprentice perhaps Hertz's stock price.

Losses Losses Everywhere!

A loss of $1.12 per share adjusted against an expected loss of 97 cents. Automotive revenue short it fell $1.81 billion against $2 billion expected. "Do. Or do not. There is no try." Apparently 'do' they did not enough.

Deleveraging: A Path to the Dark Side... or Redemption?

Deleveraging they seek. An at the market stock offering a tool it is. CFO Scott Haralson speaks of alternatives "refinancing levers and ATM optionality" he says. But beware the dark side of debt young Hertz. "Fear is the path to the dark side...fear leads to anger...anger leads to hate...hate leads to suffering." Suffering for the shareholders perhaps?

Fewer Cars Fewer Problems? Hmm Doubtful.

Fewer cars for rent they offer. Lower bookings blamed they are. Trump's auto tariffs impacted the prices. Lower consumer sentiment a factor too. Less U.S. tourism the company faces. A dangerous game this is. "Luminous beings are we not this crude matter!" But crude matter these cars are and revenue they generate or don't.

Back to Basics They Go

"Back to Basics Roadmap," they call it. Optimize vehicle utilization they aim. CEO Gil West speaks of creating "more demand than we can satisfy." A bold strategy it is. But remember "Size matters not. Look at me. Judge me by my size do you?" The size of the fleet matters it does.

Hope Remains? Maybe.

Improvements in operating expenses they tout. Goals they retain. Positive adjusted earnings by 2025 they hope. A record for vehicle sales celebrated they are. But an analyst Barclays analyst Dan Levy warns of demand risk. "Net negative," he says. And Bill Ackman's stake a boost it was. Up 90% the stock was thanks to him. But a fragile alliance the stock market is. "May the Force be with you... but maybe also a good financial advisor you need."