NEW YORK, June 25, 2026, 06:04 EDT
- Hertz shares dropped 40.7% on Wednesday to $3.00, putting the company’s market cap near $942 million.
- Borrowed shares make up 11.8% of the March total, and the $350 million in notes are tied to another 31.1%, not accounting for caps or settlement options.
- Hertz now expects adjusted Corporate EBITDA in the second quarter between $50 million and $80 million. The company raised its expected net depreciation per unit to around $300 after it took losses on used-car sales in May.
Hertz Global Holdings, Inc. (NASDAQ:HTZ) comes into Thursday’s U.S. session facing a financing issue tied to its stock that goes beyond the $100 million share sale reported in the headline.
Hertz priced 37,037,037 borrowed shares at $2.70 apiece. That’s about 11.8% of the company’s 315.1 million shares outstanding as of March 31, figures from company filings show. Hertz won’t get sale proceeds from the block. J.P. Morgan Securities or its affiliates will collect those. Hertz said it will only receive a nominal lending fee.
Biggest piece is in the debt. Hertz priced $350 million of 6.75% exchangeable senior first-lien secured PIK notes due 2030, bumping the size from $300 million. The notes start at 279.5248 shares per $1,000 principal, so about 97.8 million shares, or 31.1% of the March share count. If the $50 million option is used, it jumps to 111.8 million shares, or 35.5%.
That doesn’t mean instant dilution. Hertz can pay in cash, stock or a mix for exchanges, but any new shares from conversions can’t top 19.9% of the pre-offering count unless holders sign off. That’s about 62.7 million shares using the March base.
Hedge calculations are still front and center for traders. The share loan plus note exchange add up to 134.9 million shares, or 42.8% of the March count, before factoring in any cap or settlement moves. Hertz’s prospectus notes the share lending and related shorts could keep the stock lower while the share-lending agreement is active than it otherwise might be.
Hertz shares changed hands at $3.00 late, down 40.9% from Tuesday. At that price, the car rental firm’s market cap was around $942 million. The stock dropped 40.7% on Wednesday after Hertz slashed its Q2 outlook and said it may sell more stock, according to .
Hertz dropped more than the rest of the market. S&P 500 edged down 0.10%, Nasdaq Composite lost 0.43%, and Dow added 0.35% on Wednesday.
The stock slid to just above the $2.70 borrowed-share price and ended under the notes’ initial exchange price, which was roughly $3.58. That exchange price had been set with a 32.5% premium over the borrowed-share price.
Hertz said a narrow operating update hit its core earnings driver. For the second quarter, the company expects fleet size, revenue, revenue per day, and rental days to be in line with or just above its earlier outlook. Softness in the used car market flipped April sale gains to losses in May. Hertz now expects net depreciation per vehicle to run around $300 a month.
Hertz is now guiding for adjusted Corporate EBITDA between $50 million and $80 million for the second quarter, keeping inside its margin forecast but getting close to the bottom of the earlier range. These numbers are early and unaudited. The company said its auditor hasn’t looked at them yet, and the actuals could change.
Split between rental demand and used-car prices drove the stock lower. Hertz isn’t saying demand dropped off. Instead, it points to more trouble in selling its cars. How quickly it can unload vehicles affects write-downs, loan collateral, and lender confidence all at once.
Hertz said the notes might help with short-term cash needs. The company expects net proceeds of about $339.5 million before expenses, or $388.0 million if the full option is exercised. Hertz plans to use the funds to repay revolving-credit debt and for general corporate needs. The interest rate splits in two: 3.375% in cash and 3.375% paid in kind.
