Hertz has suspended its plan to sell up to $500 million in shares pending review by the Securities and Exchange Commission.
Shares of the bankrupt car rental firm jumped more than 6% Wednesday afternoon to $2.08. Trading of Hertz stock was halted at 11:44 a.m. ET pending news around the bankrupt company’s controversial stock sale plan.
Hertz in a regulatory filing Wednesday said the sale was “promptly suspended pending further understanding of the nature and timing of the Staff’s review.”
The SEC, according to the filing, verbally told the company of its plans to review the sale on Monday.
Hertz filed for bankruptcy May 22 as demand for car rentals dried up as travelers have stayed home during the coronavirus pandemic. The stock hit a low of 40 cents intraday on May 26. But in the days that followed, the shares began to recover and eventually surged to more than $6 per share last Monday.
Following the increase, Hertz asked the bankruptcy court Thursday to allow it to sell up to $1 billion in shares, The request was approved by the court Friday.