GME plot reenactment? Hertz's empty market sparks a buzz in the Reddit community
Comparing news, the low-priced US stock Hertz Global (HTZ) recently became the focus of attention of Reddit retail investors. Driven by better-than-expected second-quarter results, HTZ continued to rise sharply after the financial report was released, and the market began to compare this car rental company with meme stocks such as GME and AMC in 2021.
According to BIT (bit.com) market data, HTZ surged about 30% after the earnings report on Thursday, and continued to rise during the Friday session. The volume increased significantly, and attracted discussions from retail communities such as WallStreetBets.
According to MarketBeat data, as of July 15, HTZ had about 97.54 million short shares, accounting for about 31.2% of tradable shares, and the days-to-cover period was about 3.9 days. The high short ratio was compounded by a sudden rise, making bears' recovery an important driver in this round of the market.
Fundamental catalysts come from Hertz's latest earnings report. The company's second-quarter revenue was approximately US$2,396 million, up about 10% year on year; net profit was approximately US$64 million, compared with a loss of US$294 million in the same period last year. The company lost $0.11 per share, better than the market expected loss of $0.24; the adjusted EBITDA was approximately $81 million, close to the upper end of the guidance range. The improvement in used car prices will also ease the market's previous concerns about the decline in fleet residual value.
This wave of markets occurred against the backdrop of a recovery in risk appetite in US stocks. On Friday, US employment data unexpectedly weakened, and market bets on the Fed's continued interest rate hike cooled down. The 10-year US Treasury yield fell back to about 4.64%, the S&P 500 index reached a record high, the NASDAQ rose 1.3%, and the small-cap index Russell 2000 strengthened at the same time. Low-priced, high-short stocks such as HTZ are more likely to become short-term trading targets when capital is once again chasing highly flexible targets.
However, compared to GME in 2021, there is still a gap in HTZ's current emptying structure. According to the SEC report of that year, GME's short share ratio once exceeded 100% of tradable shares, and HTZ is currently shorted about 30% of tradable shares. Although it is at a high position, it has not yet reached an extreme level.
