| COMPANY |
Hertz Global Holdings, Inc. |
| COURT |
United States District Court for the Middle District of Florida |
| CASE NUMBER |
1:24-cv-00513 |
| JUDGE |
The Hon. John L. Badalamenti |
| CLASS PERIOD |
April 27, 2023 through April 24, 2024 |
| SECURITY TYPE |
Securities |
LEAD PLAINTIFF DEADLINE IS JULY 30, 2024.
If you have suffered losses and would like to discuss your rights, please fill out this form or you may contact Jonathan Naji, Esq. at (484) 270-1453 or via e-mail at info@ktmc.com.
Case Background:
A class action lawsuit has been filed on behalf of those who purchased or acquired Hertz Global Holdings, Inc. (“Hertz”) (NASDAQ: HTZ) securities between April 27, 2023 and April 24, 2024, both dates inclusive (the “Class Period”).
On January 11, 2024, Hertz revealed in a filing with the SEC that it would sell approximately 20,000 electric vehicles (“EVs”) from its U.S. fleet, or about one-third of its global EV fleet, "to better balance supply against expected demand of EVs." According to Hertz, this would "result in the recognition, during the fourth quarter of 2023, of approximately $245 million of incremental net depreciation expense related to the sale[,]" which "represents the write down of the EVs' carrying values as of December 31, 2023 to their fair values, less related expenses associated with the disposition of the vehicles." Hertz further advised that "Adjusted Corporate EBITDA for the fourth quarter of 2023 will be negatively impacted by the incremental net depreciation expense associated with the EV sales plan, and further burdened by higher depreciation expense in the ordinary course as residual values for vehicles generally fell throughout the quarter greater than previously expected."
Following this news, Hertz's stock price fell $0.40 per share, or 4.28%, to close at $8.95 per share on January 11, 2024.
On March 15, 2024, Hertz announced that its CEO and Chairman of its Board of Directors would resign from his roles by the end of the month, and that Hertz had subsequently appointed a new CEO.
Then, on April 25, 2024, Hertz issued a press release announcing its first quarter 2024 results. Among other items, Hertz reported adjusted diluted EPS of -$1.28 for the quarter, well short of the consensus estimate of -$0.43, and far worse than the adjusted diluted EPS of $0.39 that Hertz had achieved in the same period the year prior. In discussing these results, Hertz revealed that vehicle depreciation in the quarter increased $588 million, or $339 on a per-unit basis, primarily driven by deterioration in estimated forward residual values and disposition losses on internal combustion engine (“ICE”) vehicles compared to gains in the prior-year quarter. Hertz also disclosed that, of the $339 per unit increase, $119 was related to EVs held for sale. Moreover, Hertz reported a $195 million charge to vehicle depreciation to write down EVs held for sale that were remaining in inventory at quarter-end to fair value and to recognize the disposition losses on EVs sold in the period.
On this news, Hertz's stock price fell $1.12 per share, or 19.31%, to close at $4.68 per share on April 25, 2024.
The complaint alleges that, throughout the Class Period, Defendants made false and/or misleading statements and/or failed to disclose that: (1) Hertz had downplayed the financial impact of vehicle depreciation, and/or overstated its ability to track and manage vehicle depreciation; (2) demand for Hertz’s EVs was not as strong as Defendants had led investors to believe; (3) Hertz had too many vehicles, particularly EVs, in its fleet to remain profitable; (4) as a result of all the foregoing, Hertz was likely to incur significant losses on the disposition of both its ICE vehicles and EVs; (5) all the foregoing was likely to, and did, have a significant negative impact on Hertz’s financial results; and (6) as a result, Hertz’s public statements were materially false and misleading at all relevant times.
What is a Lead Plaintiff?
A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Filling out the online form above or communicating with any counsel is not necessary to participate or share in any recovery achieved in this case. Any member of the purported class may move the court to serve as a lead plaintiff through counsel of his/her choice, or may choose to do nothing and remain an inactive class member.