The EPS miss was big but you are right the revenue number was good I figure if they cut the dividend in half the stock may have been down a buck or two or possibly flat with investors believing things "are not as bad as" they expected but buy eliminating the whole dividend they lost an entire sector of investors (income) and give the impression that things could be worse than you think. This was a kitchen sink quarter they probably knew it too but based on their debt levels, oil prices and demand it will turn out to be the best thing but they should have done this months ago not at a 52 week low. These execs are asleep like the coal guys have been for the past few years. They start to believe oil prices will never go down just like house prices will never go down.
Hard to say the execs had to have put out some statements or press releases in the past that turned out to be false or misleading for investors. This is about the debt, the too big dividend sucking people in and the collapse of oil prices in a short period of time. The lawyers will be sniffing around but they may not get this one.
In three months I guess the execs did not see this coming. These guys are a lot like the coal execs building debt levels and assuming oil prices and demand will never go down. It is amazing since we saw oil go from $147 to the low $30's in about a year and that was only 6-7 years ago. What amazes me about these people is that they start to take drastic measures when their share price is already at multi-year lows.
You are probably right it may take a few days to shake out the longs holding on. No dividend makes this a long term process. The market will examine the balance sheet going forward and watch to see if saving the dividend money can help the debt problem along with watching the buy back. It would make sense for them to start buying back shares in the near future while the shares are at multi-year lows and while oil is low.
If you read from their site they did re-do some of their exiting debt possibly at lower rates and may be using some of that to buy back stock which is usually not a good idea but in this rate environment it may actually be a good move. They also raised cash with asset sales but it seems like they sold to themselves. These moves should have been done when the shares were in the $30's and higher. Like the coal companies the execs were asleep at the wheel never figuring demand and/or pricing would plunge while the domestic production was growing right under their noses with global economies still struggling.
Resume the dividend the question is if and when markets do not like uncertainty. This is dead money for awhile without any yield but on the other side they have to pay down their debt to survive with low oil prices. This may be the kitchen sink quarter time will tell.
I'm not short I am long some from the low $20's looks like a tax loss next month against my gains but in situations like this they will probably close this near the lows today I hope I'm wrong but that's the way this market works. I'm hoping today is the flush on this monster volume even though it's usually a light volume day Turkey Eve. Without any dividend income investors no longer need the stock.
Janna and Icahn own high teens percent of HTZ. They will definitely have a say in how Hertz performs going forward.
$26 plus tomorrow?
I would agree a lot of them must have believed that HTZ would stabilize up in the higher $20's after the fall from over $30 on the Icahn news then but I would also guess a lot of them were short from those higher levels also. The ride down was sparked by the constant delays involving the restatement and the CEO situation. There is some certainty now and like I told you on that day it broke $20 if I was short that was the day I would have covered all my shorts. There are additional big investors along with Icahn's recent adds and getting his insiders involved now even more. By year's end I believe this is near $27 or better $25 is very close today.
I would be happy with $26-$27 year end to start this stock may not hit $30 or more until this insane accounting stuff ends and the market has some certainty. If the write downs are worse when they do it then you may see a hit when they report it but I would guess if and when this company is finally run right in what is an incredible rental business environment this stock could be at $35 or higher by later 2015.