May 27 (Reuters) - Billionaire investor Carl Icahn, who was the largest shareholder in Hertz Global Holdings Inc, unloaded his entire stake in the rental car company at a "significant loss" days after it filed for bankruptcy protection.
According to a regulatory filingmade on Wednesday, Icahn, who held a nearly 39% stake in Hertz and had three representatives on the board, sold 55.34 million shares on Tuesday at 72 cents per share.
6 replies (most recent on top)
Don’t dwell on Icahn.
He certainly didn’t sell close to 40% to retail investors.
More interesting for our future is who bought the 55m shares and what do they plan to do with us.
Watch for 8K on ownership changes. If it is a private equity institution, they will try to defy the statement “equity holders rarely survive a bankruptcy.”
Here is what NASDAQ is saying this morning:
Investors in Hertz, which filed for Chapter 11 on Friday but then doubled its share price on Wednesday, are getting thrown for another loop this morning (28 May).
In early trading, Hertz stock is down (16.8%, -22 cents to $1.09 per share) on news that activist investor Carl Icahn has just sold his entire stake in Hertz.
Over the weekend, The Wall Street Journal noted that "equity holders rarely survive a bankruptcy" such as the one that Hertz is currently undergoing via Chapter 11 proceedings. In the newspaper's estimation, therefore, Hertz's bankruptcy held the potential to cost Icahn his "entire" investment in Hertz.
According to SEC filings in March, it cost Icahn some $1.88 billion initially to build up his stake of 55.3 million shares. Yesterday, the investing icon revealed in a different SEC filing that he had just sold all 55.3 million of those shares at an average price of $0.72 apiece, receiving just $40 million in return.
What would it take to convince Icahn to accept a -98% return on his investment in Hertz and abandon ship? Nothing less than the belief that waiting any longer would have resulted in a 100% loss as the recession dragged on.
In his filing yesterday, Icahn stated that even though he has sold his equity position "at a significant loss," he still does "continue to have faith in the future of Hertz" and believes that "based on a plan of reorganization that includes new capital, Hertz will again become a great company." But today, investors are focusing on Icahn's actions rather than his words – and imitating those actions by selling their Hertz stock.
The message is loud and clear! Icahn has left the building. Its over.
Icahn did what all the Hertz employees should do now.
Leave the sinking ship with the low qualification captain.
Hertz is clearly the Titanic. Was the nicest, but will end at the bottom.
Worked for the company for 6 years as a LM, and decided to leave last year because the culture was so toxic. The fact that Ichan bailed is truly an indication that Hertz is finished. Over the years it was clear that the company had no since of direction, and leaders that were corrupt and unqualified to run the business.
He lost 97% of his investment and still cashed out the last 3% before it turned to 0. As in investor like him, for you to pull out of your investment when you have only 3% left to lose, it speaks loudly that he sees no hope for the company.. and since stock holders are the first to get shafted in liquidation, he's taking his last pennies from his 1.5 billion investment and going elsewhere to burn it