Bankrupt Hertz ($HTZ) Allowed to Dump New Shares on Retail Rubes!

Upon the motion (the “Motion”) of the Debtors for entry of an order (this “Order”) pursuant to sections 105(a) and 363(b) of the Bankruptcy Code authorizing, but not requiring, Debtors to enter into a sale agreement with Jefferies LLC and to sell shares of the common stock of Debtor Hertz Global Holdings, Inc. (“Hertz”) through at-the-market transactions for an aggregate offering price of up to and including $1,000,000,000, which in no event will result in the issuance of more than 246,775,008 shares of common stock; and the Court having found that it has jurisdiction to consider the Motion and the relief requested therein in accordance with 28 U.S.C. §§ 157 and 1334 and the Amended Standing Order of Reference, dated February 29, 2012 (Sleet, C.J.); and consideration of the Motion and the relief requested therein being a core proceeding pursuant to 28 U.S.C. § 157(b); and venue being proper before this Court pursuant to 28 U.S.C. §§ 1408 and 1409; and due, sufficient, and proper notice of the Motion having been provided under the circumstances and in accordance with the Bankruptcy Rules and the Local Rules, and it appearing that no other or further notice need be provided; and a hearing having been held, if necessary, to consider the relief requested in the Motion (the “Hearing”); and the record of the Hearing, if any, and all of the proceedings had before the Court; and the Court having found and determined that the relief sought in the Motion is in the best interests of the Debtors, their estates, their creditors, their stakeholders, and all other parties-in-interest, and that the legal and factual bases set forth in the Motion establish just cause for the relief granted herein; and after due deliberation and sufficient cause appearing therefor,
IT IS HEREBY ORDERED THAT:
1. The Motion is GRANTED as set forth herein.
2. Pursuant to sections 105(a) and 363(b) of the Bankruptcy Code, the Debtors are hereby authorized, but not required, to enter into the Sale Agreement and perform all obligations thereunder, including without limitation, all indemnification obligations owing to Jefferies, without further order of the Court.
3. The Debtors are authorized, but not required, to sell shares of the common stock of Debtor Hertz Global Holdings, Inc. through at-the-market transactions using the existing shelf registration statement on Form S-3 (File No. 333-231878) previously filed by Hertz with the U.S. Securities and Exchange Commission and declared effective on June 12, 2019, for an aggregate offering amount of up to and including to $1,000,000,000, which in no event will result in the issuance of more than 246,775,008 shares.
4. Jefferies shall be entitled to retain, from the proceeds generated from the sale of the unissued stock, amounts equal to all fees owing under the Sale Agreement, without further order of the Court; for the avoidance of doubt, Jefferies shall not be deemed a retained professional under section 327 or 328 of the Bankruptcy Code and shall not be required to submit fee applications pursuant to section 330 of the Bankruptcy Code.
5. The Debtors are authorized and empowered to execute and deliver such documents and to take and perform all actions necessary to implement and effectuate the relief granted in this Order.
6. This Court retains jurisdiction with respect to all matters arising from or related to the enforcement of this Order.

Resurgence of Bubble

The U.S. has had three bubbles in 20 years: late 90s, 2005-2008, and the current one.

Each one has been bigger and crazier than the last.

Just the bear market bounce (April/May/June 2020) of this third bubble is crazier than any bubble before it:

Our correspondent @pdxsag (previously) writes in:

Today I had an epiphany that the markets — as they glory in their wanton, unchecked fraud — are now exhibiting the same dynamics as a crowd looking to riot.

As the Scholars Stage blog explained, riots are inherently a coordination problem. The same can be said for pump & dump schemes. If you consider investors as a motley crew of animal spirits, it would certainly stand to reason that at any point in time there exists a non-trivial number of investors that would gladly engage in blatant pump & dump stock manipulation. Their problem, of course, is how to coordinate. Like soccer hooligans looking for a riot, they need “an incident.”

If you’ve been dumb-founded by the stock runs in HTZ and CHK, it hopefully will make perfect sense when you realize that the bankruptcy filing is now the easily and universally understood “incident.” It’s akin to the sound of broken glass in a real riot. When a company files for bankruptcy protection pump & dump “entrepreneurs” quickly bid up the price to see if it "sticks.” If it’s not halted, if the exchanges and SEC make no effort to arrest the run then more traders jump on the stock driving the price higher still. Pretty soon it’s like a Macy’s being looted as hundreds of people are crashing into the stock looking to grab a quick buck and be gone. The daily volume when a stock is undergoing a viral pump & dump can be 10x of the float or more. Day traders, I suspect many of which are algos, are churning through blocks of shares not holding any individual shares for more than a few minutes at a time. Sure there is slippage with all that churn, but it’s important to not be caught holding the hot potato.

Another example of a now too obvious incident is the transparently fraudulent press release. In this market, where investors freely quip "Fraud is Alpha,” it stands to reason that a fraud-y press release is a clear signal from management to day traders that they are looking to play ball. Elon Musk has notoriously refined this to an art. In fact, today Tesla closed above $1000 for the first time ever on the back of a “leaked" email from Elon related to the development of the Tesla semi. The impetus has nothing to do with the business prospects of the semi, and everything to do with significant OTM call buying yesterday to get people’s attention and an incident today in the form of the leaked email.

We’ve seen similar incidents with various Covid vaccines news stories, press releases, and TV appearances by company CEO’s.

The markets are in one giant, late-stage pump and dump, and the regulators — like the police across many cities today — are overwhelmed and conspicuously enough to any bad actors looking for an easy looting, are standing-down.