For many traders, it’s confirmation that a stock’s short-term weakness has evolved into a longer-term downtrend.
A Crash That Changed the Story
Hertz’s current technical setup is rooted in a fundamental shock.
On June 24, the stock plunged 41% after the company slashed its second-quarter adjusted corporate EBITDA guidance to between $50 million and $80 million, blaming unexpected weakness in used-car prices. Since Hertz regularly sells vehicles from its rental fleet, falling residual values translated into larger-than-expected losses and raised fresh questions about the company’s earnings power.
The company also unveiled a $400 million financing package that included $300 million in convertible senior notes and a $100 million common stock offering. The deal, coupled with more than 37 million shares made available for hedging activities, fueled fears of shareholder dilution and sent investors rushing for the exits.
