Carl Icahn - Billionaire owns 40%+
Another billionaire has been buying in
Carl Icahn hand picked board members of hertz and so most likely has a special affinity for the company
Think of Hertz as 'Fleet Managers' of other autonomous vehicles. Where will these vehicles have safety checks, cleanings, general servicing? I guarantee you it is not going to be tesla that suddenly opens up at every single airport simultaneously... rather a company like tesla could parter with hertz for distribution, already built airport transportation infrastructure, etc.
Hertz = Future's - Autonomous Fleet Management Play for Billionaire Carl Icahn -- even more of a reason to just sit in some cash right now and wait for fully autonomous vehicles to come and then people will rent these out because people don't like to share -- let's be honest.
***** Ended with $1 Billion in liquidity!!!
Management took proper action --- Quarterly Report Deep Dive
"During the quarter the Company drew down $595 million from its Senior Revolving Credit Facility and ended the quarter with approximately $1.0 billion of liquidity, substantially in the form of unrestricted cash and cash equivalents. To mitigate the impact of the COVID-19 shutdowns on its operations, the Company took measures to adjust fleet levels, reduce staffing levels, reduce discretionary spending, renegotiate key contracts and commitments, and slash capital expenditures."
- Gives substantial liquidity such that if the company's value goes down even further past their previous PE of ~2 (hard to say now that it is negative...) They are well prepared for significant share buyback and have liquidity to shelter the storm. It does look however like we are adapting to covid quickly and are already finding solutions for the economy to continue
"In May, the Company entered into forbearance and limited waivers with certain of its corporate lenders and holders of its asset-backed vehicle debt. These provide the Company with additional time through May 22, 2020 to engage in discussions with its key stakeholders to develop a financing strategy and structure that better reflects the economic impact of the COVID-19 global pandemic and considers the Company's ongoing operating and financing requirements."
-- WILL NOT GO BANKRUPT!!!
-- MUST NOTE -- Volunteered Forbearance with larger than normal levels of cash liquidity. --> NEGOTIATING TACTIC ! NOT BANKRUPT!
-- Economy is improving so May 22 is the last time they will really have to negotiate down their debts. If they successfully do this with large liquidity it will put them in a position where their free liquidity does not have to service future debt obligations opens future optionality
** it is not in the banks interest to have Hertz go belly-up. Like in the making available of housing, America's movement and ability to get from one place to work in another is absolutely essential. More people are likely going to want rental cars as a form of transportation than returning the subway or bus system which could help maintain demand with airplane traffic coming to a standstill