Hertz Net Worth: Post-Bankruptcy Value, Stock Price & More

Over the years, Hertz’s net worth has fluctuated, reflecting the company’s resilience in the face of industry disruptions, economic downturns, and internal challenges. As of August 2024, Hertz has a net worth of $1.08 billion and offers lessons to business owners and potential opportunities to investors.

At Business2Community, we’ve consulted a wide range of sources to provide a comprehensive overview of the company’s history and the factors that have shaped its net worth. Read on to explore its multiple ownership changes, IPOs, controversies, and more.

What is Hertz’s Net Worth?

Hertz’s net worth, also known as market capitalization or market cap, was $1.08 billion as of August 2024. This is based on a Hertz stock price of $3.51.

Hertz typically releases its end-of-year financial results in late February or early March of the following year, providing a comprehensive view of its annual performance and financial position.

Overall, since November 2021, Hertz’s net worth has experienced a dramatic 90% decrease, dropping from approximately $12 billion.

Between 1918 and the early 2000s, Hertz had two IPOs and saw its net worth increase significantly. Following its third IPO in 2006, the company’s stock mirrored the S&P 500 Index until mid-2012 when it began to outperform the broader market. By May 2014, Hertz’s net worth was $12.7 billion.

However, amid declining profitability, mounting debt, and increasing competitive pressures, Hertz’s market capitalization fell to around $780 million in 2017. The company’s financial woes culminated in a bankruptcy filing in May 2020, with its net worth plummeting to $140 million.

After emerging from Chapter 11 bankruptcy on July 1, 2021, Hertz’s net worth rebounded, reaching $8.5 billion. The company returned to the NASDAQ exchange in November 2021 under the ticker symbol HTZ, raising nearly $1.3 billion and achieving a valuation of $13.7 billion at $29 per share.

By November 2022, the company’s net worth had fallen to $5.6 billion, further declining to $3.1 billion by the end of 2023.

Hertz’s Revenue

In 1923, just 5 years after its inception, Hertz was generating revenues of $1 million. The company remained profitable even after multiple ownership changes and going public in 1954.

The upward trend in revenue continued through the decades with Hertz hitting $1 billion in annual revenue well before the 1990s. By 2001, Hertz’s annual revenue was $4.9 billion. Hertz’s earnings continued to rise, exceeding $6 billion by 2005.

Like many companies, Hertz experienced financial challenges during the 2008 financial crisis. However, by 2011, the company had recovered, reporting total revenue exceeding $7 billion and a net income of $167 million.

Following a series of misguided financial decisions, the late 2010s saw Hertz report losses of $500 million in 2016, $220 million in 2018, and $53 million in 2019.

In 2020, Hertz faced unprecedented financial challenges, leading to its Chapter 11 bankruptcy filing in May. That year, the company reported a staggering net loss exceeding $1.8 billion, marking the most significant financial setback in its century-long history.

After emerging from bankruptcy in 2021, Hertz pulled off an impressive turnaround, reporting a net income of $366 million for the year. With a net income of $2.06 billion, 2022 was Hertz’s most profitable year on record.

In 2023, the company’s net income settled at $616 million, reflecting ongoing industry challenges and strategic adjustments.

Hertz Dividend History

As its ownership structure has changed multiple times over the years, Hertz’s dividend history is inconsistent and difficult to track.

In June 2006, Hertz Holdings paid special cash dividends of $4.32 per share, or approximately $999.2 million in total, to its common stockholders.

According to publicly available financial records dating back to 2010, Hertz has not paid any dividends since, nor does it expect to pay dividends for the foreseeable future.

Hertz has implemented two significant share buyback programs in its recent history. The company approved a share buyback of $395 million worth of shares of its common stock following the spin-off and restructuring of its operations in 2016. Most recently, in 2022, Hertz announced a $2 billion stock buyback plan.

Who Owns Hertz?

As a public company, Hertz Global Holdings is owned by various shareholders. As of March 2024, the largest shareholder was Knighthead Capital Management with a 38.39% ownership stake. This was followed by Blackrock Inc and Vanguard Group who own 2.58% and 2.53% of the company, respectively.

Hertz has a complex ownership history. John Hertz became the company’s second owner in 1923. Thereafter, General Motors purchased Hertz in 1927.

Omnibus Corporation acquired Hertz in 1954 and took it public as Hertz Corporation. Radio Corporation of America (RCA) acquired the company in 1967 and sold it to UAL in 1985.

Hertz came under Park Ridge Corporation’s ownership in 1987 and was taken private as a wholly-owned subsidiary of Ford in 1994. In 1997, Ford took Hertz public again.

In 2005, Clayton, Dubilier & Rice, The Carlyle Group, and Merrill Lynch Global acquired Hertz for $15 billion and took the company public once more in 2006.

In 2020, investors led by Knighthead Capital Management and Certares Management invested nearly $6 billion in capital to rescue Hertz from bankruptcy and facilitate its restructuring.

Who is the Hertz CEO?

The CEO of Hertz is Gil West. West replaced Stephen Scherr, who was appointed in 2022 and stepped down in January 2024 following the company’s disastrous foray into electric vehicles.

Between 2020 and 2024, Hertz experienced notable leadership instability, cycling through four CEOs. The rapid turnover of CEOs, including the recent transition from Scherr to West, reflects the operational and corporate governance challenges Hertz continues to face.

Compounding these issues, former CEOs have been embroiled in legal troubles related to their tenures. Notably, in 2020, the Securities and Exchange Commission (SEC) charged former Hertz CEO and Chairman Mark Frissora with aiding and abetting the company in its filing of inaccurate financial statements and disclosures between 2011 and 2014.

Frissora agreed to settle the charges and repay Hertz nearly $2 million in incentive-based compensation. That same year, three former CEOs were sued in connection with Hertz’s pattern of wrongly reporting legitimately rented vehicles as stolen.

Hertz’s Company History

Hertz Global Holdings, Inc. (formerly The Hertz Corporation), known as Hertz, is a global car rental company based in Estero, Florida. The company operates its Hertz brand as well as the Dollar and Thrifty vehicle rental brands across over 11,400 locations throughout:

• North America
• Europe
• The Caribbean
• Latin America
• Africa
• The Middle East
• Asia
• Australia
• New Zealand

1918-1959: Hertz Pioneers Car Rentals

In September 1918, Walter L. Jacobs opened a successful car rental operation in Chicago. Jacobs sold this car rental business to John Hertz in 1923 and stayed on as Hertz’s top operating and administrative executive.

The business, now known as Hertz Drive-Ur-Self System, was acquired in 1926 by General Motors Corporation.

By the end of 1932, Hertz had launched the first rent-a-car at Chicago’s Midway Airport, as well as the first Fly/Drive car rental program.

Omnibus Corporation acquired the business from GMC in 1953 and listed it on the New York Stock Exchange as Hertz Corporation in 1954, making it the first of many Hertz IPOs.

That same year, Hertz bought Metropolitan Distributors, a pioneer in New York truck leasing, for $6.75 million in cash. Metropolitan’s 4,000 trucks brought Hertz’s total fleet to 12,900 cars and 15,500 trucks.

By 1955, only five years after opening the first European office, Hertz became the first-ever car rental service to boast 1,000 locations. In 1959 Hertz introduced an innovative centralized billing system, the first of its kind in the car rental industry.

1960-1999: Hertz Goes Global

Under the ownership of the RCA in the 60s, Hertz became an international brand and by the 1970s, had established its Worldwide Reservations Centre and Data Center in Oklahoma City. This allowed the company to be online, 24 hours a day, 365 days a year, all over the world.

The 1980s saw Hertz pioneer Computerised Driving Directions (CDD). CDD was made available at over 100 airports and downtown locations throughout the US and Canada and in six languages.

Hertz Instant Return was introduced, further streamlining car rental returns. Hertz also launched its #1 Club Gold Service, which became internationally renowned for its fast, premium approach to car rentals.

In the 1990s, Hertz opened its Financial Center in Oklahoma City. The NeverLost on-board navigation system was introduced in the US, providing customers with turn-by-turn driving directions.

By then Hertz’s business activities spanned over 90 US and European branches, a notable 4,800 locations around the world, and a fleet of 420,000 vehicles.

Joining the digital revolution, Hertz launched Hertz.com in 1997, providing customers and travel agents with essential company information as well as quotation, confirmation, and cancellation capabilities. Hertz also opened a Service Center in Ireland to streamline its operations across France, Germany, Ireland, Switzerland, and the UK.

2000-2020: Hertz Files for Bankruptcy

At the start of the 21st century, Hertz was one of the largest and most recognized rental car companies in the world. To scale its customer service and other operations in the 2000s, Hertz opened its second US reservations center in Saraland, Alabama.

The company expanded its premium offerings, creating a new, three-tiered program for its top-level #1 Club Gold members, as well as the Hertz Prestige Collection offering luxury vehicles. Hertz also became the first global car rental company to operate in Japan and China.

As of the second quarter of 2005, Hertz produced around 10% of Ford’s overall pre-tax profit ($200 million). By the time of the private equity acquisition by Clayton, Dubilier & Rice, The Carlyle Group, and Merrill Lynch Global was completed, Hertz was making more than $7 billion in annual revenue.

In 2006, the company completed a $1 billion dividend recapitalization, increasing its debt load and putting the company in a precarious financial position.

After weathering 2008’s global financial crisis, Hertz embarked on an aggressive expansion strategy, acquiring:

• Advantage Rent A Car for $33 million in 2008.
• Donlen for $250 million in 2011.
• Dollar Thrifty for $2.3 billion in 2012

While the acquisition deals increased Hertz’s market share, they placed additional strain on the company’s ailing balance sheet.

At the end of 2012, the company had over $20.8 billion in total liabilities. Plus, the steep Dollar Thrifty deal, which was supposed to save Hertz about $100 million in the first year, ended up costing it another $70 million.

With the disruptive rise of ride-sharing companies like Uber and Lyft, Hertz was in the red by 2017, with a debt burden of $16 billion and daily double-digit percentage drops in its share price.

2021-Present: Hertz Struggles to Recover

After a ten-year-long decline in profitability, Hertz filed for bankruptcy. In its Chapter 11 petition, Hertz listed $25.8 billion in assets, over $1 billion in total cash, and over $24 billion in debt. Company shares plummeted to $0.40, a far cry from 2014’s highs of over $110.

Following a $6 billion recovery plan, Hertz emerged from bankruptcy. With a growth strategy focused on EVs and AI, the company achieved a record net profit of $2.1 billion in 2022.

Despite the plan, Hertz’s share price continued to fall, dropping from July 2021’s highs of $22 to $10 by December 2023. The company’s profitability had also declined by 70% from 2022.

In the first quarter of January 2024, Hertz suffered a $245 million loss due to the significant drop in the value of electric vehicles.

While the company had thrown significant weight behind EVs in 2022 and planned to convert 25% of its fleet to electric vehicles by the end of 2024, it was forced to backtrack and let go of 20,000 electric vehicles, or a third of its EV fleet.

Beyond the drop in EV value, managing the EV fleet proved to be too costly. Hertz’s execution of its ambitious strategy was lacking, and customer demand fell short of expectations. This was largely due to EVs being a relatively new technology, coupled with a lack of consumer education and inadequate infrastructure.

Ultimately, these factors combined to prevent Hertz’s provision of an enjoyable, stress-free car rental experience for consumers.

In April 2024, Hertz announced plans to sell 10,000 more EVs than planned, triggering a record sell-off. When the second quarter ended June 2024, Hertz’s share price had dropped to a low of $3.50. Meanwhile, reported earnings were also down, signaling the need for yet another turnaround strategy for the car rental giant.

Hertz Controversies

Hertz has been embroiled in financial controversies throughout the 21st century. Financial pressures leading to poor results reporting has also led to the downfall of more than one Hertz CEO.

The Hertz Accounting Scandal

On June 6, 2014, Hertz announced that it would restate or correct financial errors dating back to 2011, sending its shares down by 12%. Due to investor pressure, then-CEO Mark Frissora was forced to step down in September 2014. Hertz revised its financial results and restated them in July 2015, reducing previously reported pretax income by $235 million.

Celebrating our 25,000th #DreamCar rental in #Miami and CEO Mark Frissora upgraded customer to @Porsche! #surprise pic.twitter.com/rNKmeQmSet

— Hertz (@Hertz) September 3, 2014

In December 2018, Hertz was formally charged by the SEC and agreed to pay $16 million to settle the case. The SEC found that the inaccurate reporting occurred in a pressured corporate environment that placed improper emphasis on meeting internal budgets, business plans, and earnings estimates.

As a result, former CEO Mark Frissora was also charged for his role in the scandal and ordered to repay Hertz nearly $2 million in incentive-based compensation.

The Hertz Bankruptcy and Stock Controversy

Hertz launched a $1 billion equity offering of potentially worthless stock during its bankruptcy proceedings in June 2020. While the company issued disclaimers highlighting the risk of the stock becoming worthless it raised ethical concerns and called the company’s decision-making into question.

The controversial move saw Hertz sell around 14 million shares valued at $29 million before the SEC criticized and shut the entire operation down.

In June 2022, the company’s decision-making was again called into question when it announced a $2 billion share repurchase program.

The buyback involved the repurchase of preferred stock held by Apollo and other private investors at a 25% premium, providing them with a substantial 70% annualized return on a five-month investment.

This sparked criticism as it prioritized rewarding shareholders, particularly private equity firm Apollo Global Management, over reinvesting in the business and its workforce post-bankruptcy.

The Hertz False Theft Report Scandal

In December 2022, Hertz agreed to pay $168 million to resolve 364 claims related to falsely reporting rental cars as stolen. The scandal, dating as far back as 2008, saw thousands of Hertz customers face wrongful arrests and even imprisonment due to the company’s flawed inventory management and reporting systems.

Earlier that year, it was revealed that Hertz had filed about 3,365 police reports every year since 2008, charging customers with car theft after they rented its cars – meaning that more than 47,000 customers were likely wrongfully arrested or stopped by police. This undermined Hertz’s argument that only a “tiny, tiny” fraction of its police reports resulted in the arrest of innocent people.

The number of conversion theft reports it filed was part of the evidence in an ongoing lawsuit in which more than 100 customers sued Hertz for $529.7 million in bankruptcy court after they were stopped by police, arrested, and jailed for months for “stealing” cars they had simply rented.

Hertz had tried to keep the number hidden from the public throughout the trial, arguing that if it became known, it would put the company at a “competitive disadvantage”. However, Hertz lost a motion in court and it was revealed.

Throughout the controversy, Hertz was slammed for its lack of empathy and attempts to downplay the problem.

By repeatedly arguing that only a ‘tiny’ fraction of customers were affected, the company appeared to suggest that wrongfully incarcerating innocent individuals was acceptable, as long as it didn’t happen too often.

What Can We Learn From Hertz?

Hertz pioneered car rentals, creating a standard that less established companies struggled to match for decades. In addition to prioritizing customer service, the company also focused on:

• Expanding its fleet and vehicle options
• Increasing its global presence
• Enhancing its offerings through technology and convenience

These efforts shaped Hertz into the world’s leading global car rental company and created a powerful, reputable brand. Hertz’s brand value has since proven invaluable, helping the company weather financial crises and even emerge from bankruptcy.

However, recent years have seen Hertz fall short of its mission to treat customers honestly and ethically while providing the highest level of service and quality vehicles.

Issues such as false theft reports and allegations of renting out recalled vehicles have tarnished its once stellar reputation, costing Hertz its position as the world’s top car rental company. The key lesson here is to prioritize consumer trust to avoid losing market share to competitors.

Taking on too much debt and other questionable financial decisions has left the company vulnerable to market shocks. A  lesson from Hertz’s eroded shareholder value and net worth is ensuring a healthy balance sheet while efficiently utilizing equity capital to generate long-term value.

Additionally, recent financial troubles, highlighted by Fitch’s downgrade of the company to a ‘B-‘ rating with a negative outlook, underscore the need for financial prudence and a shift toward more sustainable growth strategies.

Strategic missteps such as not being able to adapt to changing market conditions fast enough and failing to meet customers changing preferences, have left Hertz operating at a fraction of its former glory. Key examples include prioritizing sedans and compact cars when renters preferred SUVs and more recently, the poorly timed push into electric vehicles.

Frequent leadership changes have also contributed to strategic instability. Overall, these challenges serve as yet another lesson regarding adaptability and leadership consistency in building lasting success.

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