Your neighbor may have doubled or tripled their money with Hertz (NYSE:HTZ) last week, but don’t let that distract you from your long-term goals.
This stock has a strong chance of going to zero and all shareholders could be wiped out eventually.
What happened with Hertz last week was an anomaly. It’s not investing, it’s gambling.
Without sports to bet on and many parts of the economy still shut down, millions of people have opened up brokerage accounts and started trading penny stocks with the hopes of making fast profits.
That may have worked out for a small percentage of Hertz gamblers last week, but don’t expect it to happen again.
Last Friday, a bankruptcy court approved Hertz’s request to sell up to $1 billion in stock after this wave of speculation flooded the market and caused the stock to rise from $0.82 to $5.54 in just 3 trading sessions.
They then changed their tune on that decision after security regulators vowed to review it.
But regardless of those recent highs, HTZ has already dropped like a rock – down 52% to $2.65 per share.
Stay away from this stock at all costs.