In May 2020, Hertz Global (OTC:HTZZ) filed for Chapter 11 bankruptcy as 700,000 of its rental cars sat empty during the early days of the COVID-19 pandemic. The company's rebound over the last year has been significant. Hertz has proven that bankruptcy isn't always the be-all-end-all that it's made out to be. But will Hertz manage to get itself back on a major stock exchange and off the OTC (over-the-counter) market?
Hertz looks to be planning a reunion with the U.S. stock market, but when can investors expect the transition? What major exchange will the company target this time around?
Hertz reports an improved quarter with YoY leaps and bounds.
In Hertz's most recent earnings report, the OTC-listed company reported total revenue of $1.9 billion for the second quarter of 2021—a 62 percent boost YoY. According to the company, "the improvement resulted from strong revenues, efficient fleet management and over $400 million of structural, and recurring, cost reduction."
All of that money shuffling and waist tightening has helped Hertz. The company has also benefited from the rebound in business and road travel. The services were practically a moot point when the COVID-19 pandemic was surging.
Hertz got delisted from the NYSE following bankruptcy
After filing for bankruptcy, Hertz got delisted from the NYSE. While neither the NYSE or Nasdaq have listing rules that automatically delist companies that file for bankruptcy, the exchanges do hold rules for minimum stock market value. When Hertz went bankrupt, its stock practically fell to the floor. If a stock trades under $1 for 30 consecutive days, it's out.
Since Hertz first became a pink sheet stock on the OTC market, the company has managed to fervently climb its way back into relevance. The brand still faces losses, but it has shrunk the losses significantly.
Will Hertz target the NYSE or another major stock exchange for its big return?
Hertz reports that it aims to get listed on a major U.S. stock exchange again. Right now, HTZZ stock (formerly HTZGQ when it first landed on the OTC) is trading at $16.80 per share—a dollar value that makes it eligible for a non-OTC exchange.
Investors usually view OTC stocks as penny stocks, especially when they're U.S. companies. There are exceptions to this, like with U.S. marijuana companies that can't legally trade on major U.S. exchanges. However, Hertz isn't one of those exceptions, and executives want the stock back in its reputable post.
Whether Hertz will land on the NYSE or Nasdaq isn't clear, but executives are definitely after one of them.
When to expect the Hertz relisting
Hertz hopes to relist on a major U.S. stock exchange by the end of 2021. Investors should keep their eyes peeled for Hertz stock as it continues to trade at fairly low levels and could be poised for sizable returns over the next few years. Relisting on a U.S. exchange could bolster the stock's performance simply based on improved public sentiment.