Shares of Hertz Global Holdings Inc. continued to tumble to zero on Wednesday, a day after the car rental company unveiled a restructuring proposal to come out of bankruptcy that will wipe out existing shareholders.
Hertz shares fell to 88 cents, losing 26% on the day. The drop marked the second day of deadly losses for the company’s shares after falling 28% on Tuesday to $ 1.19.
As part of Hertz’s restructuring proposal, shareholders will not receive any distributions, meaning they will not receive any reimbursement from the proposed deal. Hertz said it plans to go private when it comes out of bankruptcy. The car rental company, one of many companies deeply injured by the coronavirus pandemic, filed for bankruptcy last May.
But unlike many companies whose businesses have suffered from stay-at-home restrictions, Hertz’s story took on new life after individual investors crowded into the stock. In an event that preceded the GameStop Corp phenomenon., retail investors rocketed Hertz shares for several days in early June after the company filed Chapter 11 litigation.
In the trading session following Hertz’s bankruptcy filing, stocks slumped to 56 cents. They then topped $ 5.50 less than two weeks later, a rally of nearly 900%. In the days that followed, however, stocks fell. They’ve since traded widely below $ 2 this year before finally slipping below $ 1 on Wednesday.