Hertz (HTZ) - Get Report is reportedly hitting pause on its plan to sell up to $500 million in shares pending a review by the Securities and Exchange Commission. The decision comes after the SEC raised concerns and said the shares "could ultimately be worthless."
SEC Chairman Jay Clayton told CNBC earlier that the commission had thoughts on the sale. “In this particular situation we have let the company know that we have comments on their disclosure,” Clayton said. “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.”
"The SEC is basically telling Hertz that it has a problem with the idea of selling $500 million of stock to the public when the company acknowledges that shareholders are probably going to lose everything," said David Dierking, Editor of ETF Focus on TheStreet.
Hertz’s stock was halted for trading on Wednesday for several hours. Once it reopened, it closed up 2.6%.
Hertz filed for bankruptcy on May 22 and the SEC’s concerns regard Hertz’s plan to sell stock amid its bankruptcy proceedings.
The auto-renter was hit hard by the lack of travel, both personal and corporate, during the coronavirus pandemic.
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