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Hertz, the Original Meme Stock, Is Turning Out to Be Worthless

  • Company saw stock soar as high as $5.53 after Chapter 11
  • Bankruptcy exit plan would leave nothing for shareholders
   
Photographer: David Paul Morris/Bloomberg

It’s the version of David versus Goliath that Wall Street will like. Day traders, snapping up penny stocks on the popular Robinhood app, sought to defy decades of convention and make money on bankrupt rental-car company Hertz. The craze sent shares soaring as much as 896%, prompting Hertz to briefly capitalize on the frenzy by issuing even more stock.

The conclusion, outlined Tuesday in a reorganization plan to end Hertz Global Holdings Inc.’s nine-month trip through Chapter 11, is a cautionary tale for the little guy. Holders of Hertz shares, which traded for as much as $2.53 just three months ago, will get nothing. Hertz’s lenders, who include some of Wall Street’s giants of distressed investing, will be paid in full after collecting millions in fees and interest payments for financing the company’s reorganization.