The car rental company Hertz Global stock rocketed in the final two trading sessions of last week amid hopes that economic recovery is likely and travel companies will regain their market share. The shares of Hertz Global that fell into Chapter 11 bankruptcy a few weeks ago jumped 80% on Thursday and the stock rose 70% in Friday trading.
The car rental company was among the hardest hit companies due to lockdowns and travel restriction in wake of coronavirus outspread.
Its shares plummeted from 52-weeks high of $20 in February and bottomed around $0.50 at the end of May. The sale of the stake from big investors like Carl Icahn and Mario Gabelli’s in the past few weeks added to the share selloff. Hertz Global stock price is currently trading around $2.5.
Strong updates from the airline industry added to Hertz stock price rally because it is among the largest airport general use car rental company with almost 1,600 locations in the U.S. airports and around 1,300 locations in international airports.
Airline companies have been presenting signs of a solid recovery in the coming months. American Airlines reported that they are planning to fly 55% of domestic schedule and 20% of international flights in July compared to the last year.
The entire airline industry capacity is likely to reach 40% in July from the past year period after bottoming in March and April. European, Asian and Gulf countries have started easing travel restrictions while the US President has already announced economic reopening with strict healthcare protocols.
“We will come out of it,” Expedia Chairman Barry Diller said, but the damage will last and be tough to get out of. “We went from $300m a day in revenue to $10m a day.” And after being off about 95% or so, the co. is now off “about 80%.”