Tomahawk, WI 08/21/2014 (Basicsmedia) – Hertz Global Holdings, Inc.(NYSE:HTZ) continued to plunge in the market for the second day running highlighting the amount of challenges the company has been facing in its rental service business. The Florida-based company according to Bloomberg’s Jamie Butters was earlier forced to withdraw its profit guidance for the year, citing an ongoing accounting review as well as higher costs for recalls.
Hertz Global Holdings, Inc. (NYSE:HTZ) is set to be under increased pressure going forward considering Activist investor Carl Icahn has acquired 8.5% stake in the company consequently reiterating his desire to make changes in the company.
“It started yesterday after the close when hertz said they were making a number of changes. The head of their American rental business was leaving, and they were changing directors on the board. [..] Fir Tree and some other investors in Hertz Global Holdings, Inc. (NYSE:HTZ) are asking the board to replace the CEO, Mark Frissora, preferably with Scot Thompson, who had been the CEO at Dollar 50,” said Mr. Butters.
Fir Tree Partners which owns 3% of Hertz stock has aired its anger in the recent past and vehemently disapproved the way the current CEO was running the company. Hertz is currently facing mounting problems with its accounting departments as well as the car-rental business that continues face immense competition in the industry. Hertz Global Holdings, Inc. (NYSE:HTZ) stock sunk in the market after it withdrew its financial forecasts consequently stating that it will be below earlier projections.
“They have problems with their accounting, and they have problems with their rental business, on the business side they seem to have had problems managing their fleet,” said Mr. Butters.
Hertz has a lot of old cars in its fleet a problem that has been magnified by the fact that Hertz Global Holdings, Inc. (NYSE:HTZ) has been able to bring many people to its counters, but with few people to serve them.
Operation efficiency in the car rental business has been the main challenge for Hertz in the sense that other players in the space such as Avis Budget Group Inc. (NASDAQ:CAR) have been opportunistic on the type of cars they buy and when they dispose.
Hertz failed to post its financial results for the first and second quarters stating it could no longer rely on its financial results for the past three years; remarks that have not gone well with investors as they raise concerns about Hertz Global Holdings, Inc. (NYSE:HTZ)’s future.