I assume most of them are just doing gambling. They are fully aware that HTZ is going to be worthless in near future, but they buy the share anyway because they believe they can sell it off to someone else before the last minute.
A funny thing is that if Hartz indeed issies new shares, it makes the game a lot less favorable for those gamblers...
These gamblers are irrational. They might double down, or manage to find new gamblers, or sell before this even happens. Nobody knows what will happen, and it doesn't really matter.
Do they? Nobody buying this stock thinks Hertz is going to recover.
They think "I'm bored and buying this worthless stock is risky and fun".
That is valuable to some people, and hence why the stock price is up.
Hertz selling more shares to try to save the company is pretty dumb, because that is not what it share holders want.
Hertz new share holders want to see the company and stock burn as much people as possible in the most spectacular way possible. That's what Hertz has become.
You should have a chat with them. People absolutely believe this. Same goes for airlines and cruise lines. I'm a former hedge fund trader, so I've had many of my friends come to me lately, and seek advice. I often ask how they're making money now and they say (for instance) things like "I walk/drive by Starbucks and I see people still buying coffee, so I bought SBUX". They're not doing any sort of real analysis, but their pseudo-analytic abilities are reinforced by the Fed. They don't really think that they were right because everything went up, they think it boils down to common-sense theses like the above.
Common-sense fundamentals take a back seat to technical analysis and HFT algos these days
May be you’re not actually looking at things in a common sense way.
Shanghai = 24.28 million
(2019 numbers)
Who knows how many of those 150k RH users with HTZ own just $5 or $10 of it.
Nobody would’ve spent $8 in commissions to buy $10 in stock, but in RH you can.
Never saw any figures of what %age RH holders own in HTZ, which matters a lot more.
But say they get to the point where their balance is positive because they sold a lot of stock, wouldn’t the price of that stock go back up to the original $20 (or maybe $10, since they basically doubled the amount of shares).
This is not unique to millennials. Go back to every retail-participated bubble and you will find this condescension (and deservedly so imo). The stories of strippers in Vegas buying multiple McMansions in 2006 come to mind.
You points about relative return measures (ROI) having large base effect issues miss the point of what's going on: it's not the magnitude of the swings which are notable, but rather the circumstances around which they're occurring.
Enron was a massively complex business, and the true value of its assets was thus a massively complex question. HTZ does not enjoy this same conundrum. Other financially impaired but high name recognition names have had similar behavior (AAL, DAL, to name a few). Robinhood have lowered the bar to trading, that children are now "playing" the markets when they get bored of Minecraft and Fortnite (this is not hyperbole). And then you have one strata above who are likely the real problem and have been active in every bubble in recent memory. Financially unsophisticated adults have indoctrinated with "buy-and-hold" from the likes of Warren Buffett without understanding the edge cases likes bankruptcies (incidentally, Buffett sold all his airlines holdings which are now a retail favorite).
Simply put: people don't understand what they're doing and that's what makes this so amazing. They think "people aren't going to stop renting cars" or "people aren't going to stop flying" and so they buy the stock, cocksure that over the long-run they will be rewarded. The future outcomes of HTZ common shares is pretty certain, and not at all consistent with current retail behaviors.