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IPFS News Link • Stock Market

"The Most Absurd Moment In The History Of Capital Markets": Hertz Plans To Sell Up To

• Zero Hedge - Tyler Durden

Update (0805ET): Just when you thought the idiocy couldn't get any worse, it goes to '11'. After announcing the opportunistic sale of newly bankrupt shares in Hertz, "investors" are bidding the rental car company's stock up this morning, now back above $3.00 (up 50% this morning) and back above its pre-bankruptcy levels...

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On Monday, when the market hit its absolute blow off top phase and Robinhooders sent the stock of bankrupt Hertz as high as $6.25, resulting in a market cap of just under $900 million - a testament to the absolute idiocy of capital markets - we decided to double down on this idiocy and said that "we hope the company sells a few hundred million worth of stock - after all there is apparently endless demand for its shares - just so we can test the so-called "price discovery" of Powell's latest and greatest FOMO bubble."

Well, it turns out that some banker at Jefferies read us, however ignoring the clear sarcasm of this proposal decided to turn it into what may soon be the most insane and/or stunning, maybe even legendary capital markets product ever proposed: an Initial Bankruptcy Offering. You see, after the close on Thursday, Jefferies filed a motion in the Hertz bankruptcy case, seeking to sell $500 million in bankrupt Hertz stock (or 246,775,008 HTZ shares) in a "unique opportunity" to "raise capital on terms that are far superior to any debtor-in-possession financing."

Why is Jefferies proposing this deal? Because "the recent market prices of and the trading volumes in Hertz's common stock potentially present a unique opportunity for the Debtors to raise capital on terms that are far superior to any debtor-in-possession financing."

In other words, the feverish retail participation in the most ridiculous asset bubble ever created by the Fed is just the opportunity Jefferies - and Hertz - needed to turn the bankruptcy process on its head.


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