Hertz Global Holdings is turning to investors for fresh cash as the rental-car giant works through a difficult turnaround and faces growing uncertainty in the used-car market, one of the most important drivers of its profitability.
In filings with the U.S. Securities and Exchange Commission on Wednesday, Hertz announced plans to raise approximately $400 million, consisting of $100 million in common stock and $300 million in exchangeable senior first-lien secured notes due 2030.
The move gives Hertz additional financial flexibility at a time when the company continues to rebuild following years of challenges, including its bankruptcy restructuring, heavy losses tied to electric vehicles, and ongoing pressure from fleet depreciation costs.
The larger portion of the financing comes through exchangeable notes, a type of debt that can later be converted into shares. The stock component is structured through a share-lending arrangement involving J.P. Morgan, allowing investors purchasing the notes to hedge their positions.
The capital raise comes as Hertz manages several financial pressures. During its most recent earnings call, company executives said they planned to limit fleet growth during the first half of the year while monitoring market conditions. Management also pointed to obligations including a settlement with Wells Fargo and a reduction in available revolving credit capacity.
At the center of Hertz’s turnaround remains the used-car market.
Unlike many companies, Hertz depends heavily on the resale value of its vehicles. The company purchases cars, rents them to customers, and later sells them into the used-car market. The higher those resale prices remain, the lower Hertz’s depreciation costs and the stronger its profits.
When used-car prices decline, the opposite occurs.
Hertz has warned investors that vehicle residual values can change rapidly and unexpectedly, creating significant swings in profitability. Earlier this year, stronger used-car pricing helped improve results. During the first quarter, monthly net depreciation per vehicle fell to $312, an improvement of 13% from a year earlier.
Any renewed weakness in used-car prices could reverse those gains.
The company is showing signs of recovery but remains far from a complete turnaround. First-quarter revenue increased 11% to $2.0 billion, marking Hertz’s strongest growth rate in three years. However, the company still reported an adjusted operating loss, with adjusted corporate EBITDA of negative $161 million.
Chief Executive Gil West has focused the company on what he calls a “Back-to-Basics” strategy centered on disciplined fleet purchases, stronger pricing, operational efficiency, and expanding direct vehicle sales through Hertz Car Sales.
Investors are also still watching the aftermath of Hertz’s highly publicized electric-vehicle strategy. The company purchased large numbers of EVs, including Teslas, before falling resale values forced substantial write-downs. Those losses contributed to a 2025 net loss of $747 million and damaged investor confidence.
The stock continues to trade near multiyear lows as Wall Street waits for evidence that the turnaround can produce sustainable profits.
For consumers, Hertz’s situation highlights how rental-car pricing is influenced by factors beyond travel demand. Used-car values, financing costs, and fleet availability all play major roles in determining rental rates. When costs rise or vehicle values fall, rental companies often maintain tighter fleets and firmer pricing.
For shareholders, the capital raise provides needed liquidity but also brings dilution through the issuance of additional shares.
The financing buys Hertz time, but the company’s future still depends on one critical factor: whether it can complete its turnaround while navigating an unpredictable used-car market. After bankruptcy, an EV misstep, and years of volatility, Hertz is once again asking investors for patience as it works toward a more stable future.
JBizNews Desk | New York
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