Trading in Hertz Global Holdings shares was halted ahead of news on Wednesday, shortly after a top U.S. regulator publicly discussed concerns with the car-rental company’s plan to sell shares to finance its operations during bankruptcy.
The company’s stock was down 22% for the session before trading was stopped. In an interview with CNBC, Securities and Exchange Commission Chair Jay Clayton said that SEC staffers had “comments” about Hertz’s financing plans.
Hertz filed for bankruptcy on May 26, but its shares have climbed nearly 250% since then. Individual investors have bet that the company could have some value for shareholders after the reorganization—a rare occurrence.
“In this particular situation we have let the company know that we have comments on their disclosure,” Clayton said on CNBC. “In most cases when you let a company know that the SEC has comments on their disclosure they do not go forward until those comments are resolved.”
Last week, a bankruptcy judge granted permission for Hertz to sell up to $1 billion in shares to finance its operations. And on Monday, the company disclosed plans to sell up to $500 million of its shares in secondary markets at prevailing prices.
Write to Alexandra Scaggs at alexandra.scaggs@barrons.com
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June 17, 2020 at 11:35PM
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Hertz Stock Is Halted as SEC Flags Concerns Over Share Sale - Barron's
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