Hertz is a 100-year-old American car rental company founded in 1918. It joins the roster of other iconic brands that have filed for bankruptcy like JC Penny, J. Crew, Gold’s Gym, Whiting Petroleum etc.
The company lost 85% of it’s Market Capitalization in a single trading day on 26thMay, when it was publicly announced that it has filed for bankruptcy. However, what is remarkable is that the stock is up 1300% from that day. It shot up 83.8% on Thursday, 71.3% on Friday, and 115.2% on Monday to $5.53 on a record trading volume of more than half a billion shares. Astonishing, isn’t it?
The people behind this illogical rally are speculated to be the Robinhood Traders, a lot of whom are amateur traders looking to make a quick buck. Robinhood is a hot share trading app used majorly by the US millennials, loosely equivalent of Upstox and Zerodha we have in India. There were over 100,000 Robinhood users holding Hertz on the opening of Monday and 140,000 at the close.
This also kind of gave me a Yes Bank déjà vu.
One of the brilliant tweets said, After robbing Warren Buffett from his airlines they now stole Carl Icahn’s Hertz. And I wondered why they called it Robinhood – @mbrand85
You can never always understand what goes on in the markets.