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

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

#151

Post by jjeaff »

brandmeyer wrote: post #107
ISL wrote: post #98

Earlier quoted context omitted.

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…

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.

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

#152

Post by jfengel »

saalweachter wrote: post #138
jfengel wrote: post #136

Earlier quoted context omitted.

The sum of all monies lost trading S&P500 shares should be negative, since the index as a whole was up. Which isn't to say it'll be up forever, but over a scale of years it has historically always been up. Even if you lost money trading S&P 500 shares, somebody else made more, which is why the index is up. Even so, that figure isn't really relevant to the GP's point. Their point was that in addition to the price of t…

When you factor in stock buybacks -- which are sort of but not quite the same as dividends -- it's "sort of" like 3%. (My vague understanding is that for complicated and silly reasons, many more companies have preferred stock buybacks to dividends in recent decades, but it's still money flowing back from companies to investors.)

That's a very good point. Thank you; I had missed that.

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

#153

Post by skybrian »

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…

Under this argument, why should it be legal for anyone to sell Hertz stock? Should trade be halted?

Or if other people can sell the stock, why not Hertz?

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

#154

Post by zaphar »

brewdad wrote: post #110
foerbert wrote: post #102

Earlier quoted context omitted.

That description also fits straight up robbery. I don't think it's a particularly meaningful statement in this situation.

People were buying a lottery ticket. The difference in this case is that there were no jackpot winners.

It's not uncommon for actual lotteries to have no jackpot winners in a given timeperiod. That's why the pot size keeps growing. At some point the hype from how many big the potential but unlikely payout got increases the share of people buying the ticket. The different between the Hertz stock and a lottery ticket is that eventually the Lottery will payout. But with a stock like Hertz there is no such guarantee.

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

#155

Post by dragontamer »

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.

Different jobs for different courts and bureaucracies. Ultimately, the SEC determined it was illegal for them to proceed. But I guess the SEC assumed the bankruptcy courts would do the right thing. When that clearly wasn't the case, the SEC stepped in (a bit late: after $29 million was raised. But better late than never)

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

#156

Post by karmelapple »

jboog wrote: post #139
VHRanger wrote: post #3

Obviously? The company was bankrupt. People who bought HRTZ after bankruptcy had to have known it was a game of financial musical chairs, much like GME, TSLA or BTC.

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 someone not realizing a casino could wipe out your money. But making sure everyone fully understands this - educating people who are risking money - certainly seems like a thoughtful thing for countries to incentivize.

But unless all the financial websites have to be styled to look like a casino, or areas of a physical bank space put up neon lights and blinking signs to emulate Vegas casinos, I don’t know if we can ever drive the point home clearly enough.

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

#158

Post by mikestew »

Judgmentality wrote: post #91
ludocode wrote: post #77

Earlier quoted context omitted.

> actively building the largest and most advanced factories on every major continent They are not the most advanced factories, not even close. Tesla uses much more human labor per vehicle than its competitors; the "alien dreadnought" never materialized. "Toyota remains well ahead of Tesla in terms of manufacturing efficiency, producing more vehicles per employee, while utilizing its fixed assets and inventory more ef…

> The industry shift towards electric vehicles is because it's finally becoming profitable to make them. This is largely due to a dramatic reduction in battery costs which is driven by R&D for smartphones, not cars. Personally I don't believe Tesla has much to do with it. As much as I agree with the rest of your comment, I have to disagree with this part. Yes, there is a shift towards profitability with electric vehi…

Their tooling is set up for it.

You know what else "their tooling is set up" for? Being changed in a short period of time for whatever the next hotness is.

But I genuinely believe they are responsible for bringing EVs to market ~3 years before it would have happened without them.

How do you reconcile that statement with the fact that while folks were waiting for Tesla to fill their Model S pre-orders, we were already driving a Nissan Leaf? The Leaf was going to happen whether or not Tesla ever built a single car, or even if Tesla never existed. I mean it's nice that Tesla fans jumped on the EV bandwagon, even if a little late, but let's not pretend Tesla wasn't late to the production EV game.

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

#159

Post by Pyramus »

rsynnott wrote: post #130
Judgmentality wrote: post #91

Earlier quoted context omitted.

> The industry shift towards electric vehicles is because it's finally becoming profitable to make them. This is largely due to a dramatic reduction in battery costs which is driven by R&D for smartphones, not cars. Personally I don't believe Tesla has much to do with it. As much as I agree with the rest of your comment, I have to disagree with this part. Yes, there is a shift towards profitability with electric vehi…

> There are many things I dislike about Tesla. But I genuinely believe they are responsible for bringing EVs to market ~3 years before it would have happened without them. This feels vaguely ahistorical. The best-selling electric car platform in Europe today is the Renault Z-E platform (or at least it was; VW may have overtaken by now). That platform was announced in 2009 or so, with the first cars in 2011, and the f…

I'm a Tesla skeptic like parent but I believe parent is right: Tesla has advanced the EV market by maybe 3-5 years.

You are correct about timings. What you are missing is

1) Adoption and perception. The public and mainstream media love 'EV Jesus' and his perceived dedication to 'the mission'.

2) User experience, in particular charging. Tesla still today has the biggest charger network and charging is a crucial remedy for range anxiety.

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

#160

Post by TomSwirly »

lotsofpulp wrote: post #95
brandmeyer wrote: post #94

Earlier quoted context omitted.

I like his argument. Its pretty reasonable in its principles. But it doesn't work in this situation. Hertz raised 10^7 dollars this way when they were 10^9 in the hole. Looks to me like the executives saw an opportunity to part some people from their money and took it. An outside investor is sharing shares they already have, or short-selling shares with the promise to buy them back later. That's wildly different from…

> Looks to me like the executives saw an opportunity to part some people from their money and took it. AKA business. > That's wildly different from issuing new shares when you have inside information which prices them at zero. That’s wildly different from Hertz’s bankruptcy being public information. If people want to gamble on unlikely outcomes, that’s their business.

Selling something that you know will end up worthless because you know suckers will buy it is wrong.

It's morally and ethically theft. Gross, filthy, self-conscious theft.

The fact that people just laugh and say, "That's business!" is an indication of how morally bankrupt the business world is.

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