Hertz, the original meme stock, is turning out to be worthless

Post by Retric » Tue, Mar 09, 2021, 9:07 PM UTC

jjeaff wrote: post #151

brandmeyer wrote: post #107

Earlier quoted context omitted.

No. No! I reject this rationale. Just because its in the domain of finance and business doesn't make it ethical. For example, you can't just disclose your way into arbitrary medical experiments on people. Regardless of how you rationalize the principles, it will end up exploiting the most vulnerable citizens. While I readily admit that the law does not forbid all forms of unethical behavior, I do believe that it shou…

Then it should also ban gambling.

Post by thaumasiotes » Tue, Mar 09, 2021, 9:10 PM UTC

gruez wrote: post #140

thaumasiotes wrote: post #72

Earlier quoted context omitted.

> We can’t simply continue trading Hertz stock as a speculative gamble when the company goes under. What? Why not? Not only can we continue to trade stock in a defunct corporation, we do . Take a look over here: https://www.liveauctioneers.com/item/85889867_imperial-india...

That's trading the stock certificates, not the stock itself. Nowadays there aren't any stock certificates anymore so that point is kind of moot. I doubt you can still trade enron shares, for instance.

Post by hrishi » Tue, Mar 09, 2021, 9:14 PM UTC

ISL wrote: post #98

brandmeyer wrote: post #78

Hol' up. While in bankruptcy, some fools ran up the price of Hertz stock. Then, while the price was up in the middle of bankruptcy proceedings , Hertz sold some new shares to the same fools. The final result of the bankruptcy wiped out all of the shareholders. While the buyers were obviously fools, Hertz should have known that zero shareholder value was a likely outcome. How was selling more stock in that situation l…

Zero shareholder value was the overwhelmingly likely outcome, but not completely certain. (If Hertz magically recovered from bankruptcy, however unlikely, the payoff might have been >1000%). The prospectus clearly stated that there was negligible likelihood of return. On the flip side, from the creditor's perspective: "We loaned you a bunch of money, you can't pay it back, and there are some people who would like to…

Post by scatters » Tue, Mar 09, 2021, 9:17 PM UTC

karmelapple wrote: post #156

jboog wrote: post #139

Earlier quoted context omitted.

If you read some of the posts on WSB a huge number of people just really have no clue about capital markets, investing, or basic business sense. I don't know how many times I saw people claiming GME would go to $1000 because the new CEO has a brilliant new scheme to turn the company around by going digital! Why "going digital" in 2021 means your company is worth 100X what it was a few months ago I'll never quite unde…

Would you say those same people who just learned the phrase “short” or “short squeeze” are likely the same kind of people going to the casino and thinking they can successfully count cards? As mentioned elsewhere in here, it’s ultimately gambling. It’s putting money up, exposing it to risk that could completely wipe you out. If someone doesn’t understand that about stock investing, I think they’re very similar to som…

Post by dalbasal » Tue, Mar 09, 2021, 9:29 PM UTC

dragontamer wrote: post #155

brandmeyer wrote: post #78

Hol' up. While in bankruptcy, some fools ran up the price of Hertz stock. Then, while the price was up in the middle of bankruptcy proceedings , Hertz sold some new shares to the same fools. The final result of the bankruptcy wiped out all of the shareholders. While the buyers were obviously fools, Hertz should have known that zero shareholder value was a likely outcome. How was selling more stock in that situation l…

> How was selling more stock in that situation legal? They asked the bankruptcy court, and the bankruptcy court's job is to maximize value for the bondholders. Turns out that selling worthless stock (for money) is really good for the bankruptcy proceedings (getting maybe 70% of the money back instead of 60%). Then the SEC came in (whose job is to protect retail investors), and the SEC told them to knock-it-off. Diffe…