Hertz Global Holdings saw its shares tumble more than 20% in pre-market trading on Wednesday after it trimmed its second-quarter outlook for Adjusted Corporate EBITDA and outlined a package of equity and debt transactions to raise capital.
In a preliminary filing with the U.S. Securities and Exchange Commission, the car rental company revised its Q2 Adjusted Corporate EBITDA guidance to a range of $50 million to $80 million. The company attributed the downward revision to an unexpected softening in the used-car market that produced losses on vehicle sales in May 2026, offsetting gains recorded in April 2026.
Those losses affected Hertz's net depreciation metric. The company now anticipates net depreciation per unit per month for the second quarter to be roughly $300, a change it linked directly to the swings in resale results between April and May.
Operationally, Hertz said several core metrics remain resilient. Fleet size, aggregate revenue, revenue per day and total rental days are expected to meet or slightly exceed prior expectations. Management said demand is healthy and that capacity utilization has come in better than originally anticipated. Year-over-year growth in revenue per day for the second quarter to date has accelerated compared with the trend in the first quarter.
Alongside the guidance adjustment, Hertz disclosed a proposed equity transaction structured as a $100 million common-stock offering implemented through a share lending arrangement with J.P. Morgan Securities LLC. Under the arrangement, Hertz will lend shares to J.P. Morgan Securities LLC, which will serve as the share borrower and as underwriter. J.P. Morgan or its affiliates will receive all proceeds from the sale of the borrowed shares.
Hertz stated it will not receive any proceeds from that offering; instead, it will collect a nominal lending fee for the use of the shares. The share borrower has indicated an intent to sell the borrowed shares and to use the resulting short position to facilitate hedging transactions for investors in a separate private offering.
Separately, Hertz Corporation - a wholly owned indirect subsidiary of Hertz Global Holdings - plans to offer $300 million in aggregate principal amount of Exchangeable Senior First-Lien Secured Payment-in-Kind (PIK) Notes due 2030 in a private placement to qualified institutional buyers under Rule 144A.
Those notes will be exchangeable into cash, shares of Hertz common stock, or a combination of both at The Hertz Corporation's election. The company said net proceeds are intended for general corporate purposes, which may include repayment of outstanding debt.
The company noted a linkage between the two financings: the concurrent stock offering is contingent on the closing of the notes offering, while the notes offering is not dependent on the stock offering closing.
Hertz is headquartered in Estero, Florida, and operates a global network of more than 11,000 rental locations across 160 countries. The simultaneous guidance cut and capital-raising moves prompted a sharp pre-market selloff as investors absorbed the implications of weaker used-car resale dynamics and the dilutive potential of the announced transactions.
Contextual notes
- Guidance revision: Adjusted Corporate EBITDA for Q2 narrowed to $50 million - $80 million due to resale losses in May.
- Net depreciation: Now expected to be approximately $300 per unit per month for Q2.
- Financing package: $100 million equity sale via share lending arrangement with J.P. Morgan and $300 million of exchangeable PIK notes due 2030 in a private placement.