Hertz officials disclosed that soft demand for pre-owned vehicles forced realized losses on fleet sales throughout May. This downturn is expected to push net depreciation to approximately $300 per unit each month for the current quarter. Compounding the investor anxiety, the company revealed plans for a $100 million stock offering to bolster its position.
In section Market Quotes
Hertz Warning Triggers Sell-Off in Rental Car Sector
A 31% plunge in Hertz Global Holdings stock rippled through the rental car industry Wednesday, dragging Avis Budget Group shares down 5% to $180.65. The market reaction followed a sobering second-quarter update from Hertz, which pointed to a cooling used-vehicle market that is eroding the company’s profit margins.
While Avis Budget shares retreated on the news, the company’s stock remains up 53% over the last three months. The sharp decline in Hertz shares to $3.49 underscores the volatility currently facing rental operators as they navigate a shifting secondary market for their aging fleets.
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