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The Badass and the (Almost) Bankrupt

Posted January 03, 2022

Matt Insley

By Matt Insley

The Badass and the (Almost) Bankrupt

The year 2021 was another one for the record books. The novel coronavirus mutated multiple times… the global pandemic persisted… and Reddit/WallStreetBets/Robinhood played fast and loose with the stock market.

Take one of the original meme stocks – rental car company Hertz Global Holdings Inc. – which was rescued from bankruptcy by newbie investors who had time and money to burn.

Just to give an idea how volatile Hertz stock has been, on July 1, 2021 -- the first day Hertz started trading over-the-counter (before moving to the Nasdaq) -- the stock “opened at $22 and almost immediately surged more than 50% to $35 before reversing direction and tumbling to as low as $16, then rising again,” Bloomberg reports.

The stock finally closed that day at $26.99 per share, up 23% from start to finish. A wild ride… which just got wilder… 

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Your Rundown for Monday, January 3, 2022...

Match Made In Heaven

In October, Hertz announced it ordered 100,000 new Teslas in an effort “to build the largest electric vehicle fleet in North America,” says the Financial Times.

“[Hertz], which filed for bankruptcy… after its business was hit during the pandemic, said it would ‘offer a premium and differentiated rental experience for the Tesla EVs.’”

Per the announcement, the EVs were scheduled for delivery by the end of 2022. And if Tesla makes good on fulfillment, electric vehicles will comprise 20% of Hertz’s entire fleet.

Hertz

Courtesy: Hertz

Taking into account lingering global supply-chain shortages, that’s a tall order…

[EV batteries alone call for a number of metals that are in limited supply. Something CEO Elon Musk has been vocal about: the need to mine more nickel (intrinsic to Tesla’s batteries). Although Musk also has been exploring new battery options.]

Indeed, Hertz admitted its EV target might be hindered by worldwide shortages. But FT notes: “the launch of Tesla’s [battery] gigafactories in Austin and Berlin in coming months should help boost the electric automaker’s capacity.”

This morning, we read Tesla had a banner year, delivering a record one million EVs – give or take – in 2021. And 300,000 Teslas in Q4 alone… with a number of those vehicles delivered to Hertz.

TSLA is up about 7% this morning while Hertz shares (Nasdaq: HTZ) are up about 3%. In short, the Hertz-Tesla partnership has been a match made in heaven.

Market Rundown for Monday, Jan. 3, 2021

S&P 500 futures are up 18 points to 4,775.

Oil’s down 1% to $74.40 for a barrel of WTI.

Similarly, gold is down 1% to $1,808.10 per ounce.

And Bitcoin is up 0.30% to $47,125.

Send your comments and questions to, TheRundownFeedback@StPaulResearch.com

We hope your week – and your year – is off to a good start! We’re looking ahead to a wonderful year at The Rundown, keeping you abreast of up-to-the-minute and investable ideas and opportunities.

For The Rundown,

Matt Insley

Matt Insley
Publisher, The Rundown
TheRundownFeedback@StPaulResearch.com

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