|Bid||0.0000 x 45100|
|Ask||0.0000 x 29200|
|Day's range||1.6600 - 1.9900|
|52-week range||0.4000 - 20.8500|
|Beta (5Y monthly)||N/A|
|PE ratio (TTM)||-0.00|
|Earnings date||02 Nov 2020 - 06 Nov 2020|
|Forward dividend & yield||N/A (N/A)|
|1y target est||20.00|
Hertz continues to make big moves, and investors continue to trade -- so are Hertz shares really worthless?
(Bloomberg) -- They swooped in to buy the debt of pandemic-battered airlines and cruise companies. Some got in on the lucrative role of funding Hertz Global Holdings Inc.’s bankruptcy reorganization, while others made wagers against commercial real estate. Now, some of the most seasoned distressed-debt traders are totaling up big gains.Funds run by firms from Knighthead Capital Management to Diameter Capital Partners and Apollo Global Management notched returns that in some cases are approaching 50% after capitalizing on last year’s pandemic-induced market turmoil. While not necessarily the financial world’s biggest winners in a wildly volatile year that produced a more than 16% gain in the S&P 500 Index, they outmatched peers. Distressed debt funds on average gained 11.4%, according to Hedge Fund Research Inc., while the riskiest corporate bonds rose 2.3%.Though not all of the industry has finalized their numbers for 2020, Bloomberg News rounded up results for several of market’s most well-known distressed-debt and credit trading shops, along with the trades that helped generate those gains. The information compiled is based on people who’ve been briefed on the results but weren’t authorized to speak publicly. Representatives for each of the firms declined to comment.Apollo GlobalApollo’s flagship credit hedge fund posted gains even in early 2020 when most of its rivals were nursing losses. Through December, the $3.4 billion Apollo Credit Strategies Fund was up about 26% before fees.The fund is run by John Zito, senior partner, deputy chief investment officer and co-head of global corporate credit.Apollo began amassing beaten-down investment-grade debt in March, and saw the holdings rally after the Federal Reserve started buying up those notes. The firm’s credit fund had a net-short portfolio but shifted to a net long approach after the market plunge in March.The fund also made a profit on Hertz, first taking a short bet on the rental company before buying up first-lien debt and other financings. The vehicle also profited from wagers against energy and CMBX 6, a commercial mortgage-backed securities derivatives index with high exposure to shopping malls.Apollo also benefitted from bullish credit bets on Frontier Communications Corp. and Advantage Sales & Marketing Inc.Bardin HillBardin Hill Investment Partners, which manages nearly $9 billion in assets, started a credit fund in April to target debt pummeled by the market’s dive. The Bardin Hill Opportunistic Credit Fund, now with roughly $400 million of assets, posted an annualized gain of 31%.New York-based Bardin Hill specializes in targets with $500 million of debt or less. Jason Dillow, chief executive officer and chief investment officer, said in a December interview that his firm is looking to lend to certain sectors like fitness and wellness that can snap back in a post-pandemic world.The firm also spent time on travel and leisure, chemicals, and event and ticketing-related businesses. The majority of Bardin Hill’s capital is invested in secured debt, Dillow said. It looks to finance operating companies, adding positions that are ahead of existing creditors in line for repayment.Diameter CapitalDiameter posted a return of 24% at its main $5 billion hedge fund. A $1 billion draw-down fund that started in April gained about 47% through December.The firm saw some of its biggest wins from travel credits and software loans. The credit manager participated in Hertz’s bankruptcy and bought debt tied to Carnival Corp. The firm also bought a chunk of investment-grade bonds in March to capitalize on cheap valuations for healthier companies amid the turmoil.New York-based Diameter was founded by partners Scott Goodwin and Jonathan Lewinsohn in 2017. The firm invests in securities including in high-yield and investment-grade bonds, loans and credit-default swaps.Knighthead CapitalDistressed-debt shop Knighthead gained 15% in its flagship fund last year. The $4.5 billion firm, run by Tom Wagner and Ara Cohen, saw its drawdown fund surge, bringing its internal rate of return since its mid-2019 inception to 55%.Knighthead’s returns were driven by investments in Sabre Corp., PG&E Corp., Azul SA, Latam Airlines Group SA, Marathon Petroleum Corp. and pipeline bonds.Mudrick CapitalMudrick Capital Management, which manages $2.8 billion, gained about 12% in its flagship hedge fund, making much of its money in the fourth quarter.The fund’s returns were driven in part by a CMBX 6 short bet, and it also made money on investments in Gogo Inc., Ligado Networks LLC, and AMC Entertainment Holdings Inc. The hedge fund recently committed to lending $100 million to the world’s largest movie theater chain. Mudrick also sold its position in cxLoyalty Group Holdings Inc. to JPMorgan Chase & Co. for a profit.The New York-based firm was founded in 2009 by former Contrarian Capital Management money manager Jason Mudrick. The firm is expanding further into Europe with the takeover of a credit hedge fund previously run by CVC Credit Partners, Bloomberg reported earlier.Redwood CapitalRedwood Capital Management gained 10.7% at its main Redwood Master Fund through year-end. Redwood’s second drawdown fund posted an internal rate of return of 45% for 2020. The firm’s Opportunity Fund, which oversees $1.5 billion in high-yield and stressed debt, gained 11%.Redwood, which manages $7 billion, had less than one-fifth of the cash in its $1.5 billion drawdown fund deployed before the Covid-19 crisis rattled markets, Bloomberg reported. It invested $1.3 billion from late February through late September as markets and the economy were roiled by the spread of the virus, according to an investor letter.The Englewood Cliffs, New Jersey-based firm put money to work in hard-hit industries like hospitality, cruise ships, real estate and aerospace. It also invested in Argentina and purchased healthier investment-grade securities and leveraged loans as risk premiums blew out. Specific bets included Cheniere Energy Inc., Ford Motor Co., SoftBank Group Corp., Marriott International Inc. and real estate investment trust Vereit Inc., the letter said.Sound Point CapitalSound Point Capital Management’s Distressed Loan Opportunity Fund launched in January 2020 and finished the year with an annualized gross return of 65.6%. The roughly $400 million fund focuses on broadly syndicated loans trading below 90 cents on the dollar and remains active in restructuring situations. The fund invests across sectors and currently holds over 20 issuers.New York-based Sound Point, which manages $22 billion, targets stressed and distressed loans that vehicles like collateralized loan obligations and daily liquidity funds typically look to exit.(Adds CCC bond performance in the second paragraph. An earlier verison of this story corrected the HFR index gain in the second paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) -- Vaccine developers, electric-vehicle startups and a bankrupt car-rental company captured the imagination of individual investors in 2020 as Reddit chat rooms touted the so-called meme stocks as the next big winners.“You saw an amazing amount of volume compared to normal and that came from the retail side,” said David Wagner, a portfolio manager at Aptus Capital Advisors. “The dumb money was the smart money this year” as lower-quality stocks -- those with negative earnings and substantial debt -- outperformed value stocks.The wild swings reflected bets by individuals, many of them new to the market, who looked to brokerage apps like Robinhood Markets to pass the time during the pandemic, especially after cashing stimulus checks. However, many trades weren’t based on companies’ financials, but rather on alluring products or stories circulated through memes online by other traders. As a result, some bets turned out better than others.Below is a list of some of the wackier trades of the year.Hertz Global Holdings Inc.Hertz Global Holdings Inc. became one of the first household names to file for bankruptcy after the coronavirus outbreak sent demand for rental cars plummeting in the wake of travel restrictions and shutdowns around the world.The shares fell as low as 40 cents. And then something odd happened. Trading volume spiked and hordes of investors -- possibly looking for a cheap way to buy the dip -- piled into the virtually worthless stock, driving it up more than 10-fold at one point.Leaning into the craze, Hertz attempted to sell even more shares in order to raise some cash. A judge approved the sale. But the company called it off after regulators stepped in. Hertz didn’t return a request for comment.Eastman Kodak Co.Investors in Eastman Kodak Co. experienced euphoria that lasted just a matter of days after the 132-year-old company said it would begin manufacturing Covid-19 drug ingredients. The storied photography giant was the recipient of a $765 million government loan from the Trump administration in an attempt to speed production of critical medicines.The stock surged 1,481% over the course of three days in July as investors cheered yet another attempt by the company to reinvent itself. But within a week, Senator Elizabeth Warren called for an investigation into potential insider trading. The shares collapsed as critics began to question why the loan was issued to the company, and it was put on hold pending further investigation.Later in September, a legal report commissioned by Kodak determined the company had mishandled the process but there had been no insider trading. Then in December, a probe from the inspector general of the agency that brokered the deal also said it discovered no wrongdoing.Kodak shares are still nearly double the price of where they started the year. The company said it “does not speculate or comment on investors’ decisions,” adding that it’s “concentrating on growing” its core businesses including manufacturing key starting materials for pharmaceuticals.Nikola Corp.Once called “more of a business plan than business” by a Wall Street analyst, electric-truck startup Nikola Corp. is emblematic of the speculative trading that sent EV stocks surging this year.After going public in a reverse merger with a blank-check entity in June, Nikola commanded a market capitalization of nearly $29 billion, topping even Ford Motor Co. However, the post-IPO euphoria did not last as billions were gradually trimmed from its valuation over the next two months.The stock saw a brief pop in September after a tentative collaboration with General Motors Co. was announced. But soon after, short seller Hindenburg Research accused Nikola of deceiving investors about its technology and vehicles, spurring a chain of troubles including federal investigations.The company denied the allegations and said Hindenburg was trying to manipulate the market. Founder Trevor Milton later stepped down as chairman and a severely truncated deal with GM was announced.Nikola shares are now down more than 80% from their June peak, with a market capitalization of about $5.3 billion. A Nikola spokesperson denied a request for comment.United States Oil Fund LPAt the depths of the oil market’s plunge in April, mom-and-pop investors turned to the U.S.’s biggest oil exchange-traded fund, the United States Oil Fund LP, to bet on a rebound.The only problem is that USO isn’t a direct bet on oil prices and incurs costs from rolling over its futures positions that hamper performance when longer-dated contracts cost more than the current one. As a result, the wagers contributed to even more market mayhem and may have even helped push crude prices below zero.Amid the turmoil, the fund made a series of investment strategy changes in addition to halting the creation of new shares. The moves would later draw scrutiny from U.S. regulators around risk disclosures. However, the ETF still proved popular, even after U.S. securities regulators recommended an enforcement action against the fund.It is only more recently -- with relatively stable oil prices and vaccines on the horizon -- that the fund has seen any significant outflow. A request for comment was not returned.Novavax Inc.Vaccine developers -- including those that have never had a commercial product and have no revenue -- had perhaps their best year ever as the biotech sector raced to develop inoculations for Covid-19.Leading the pack was Novavax Inc., which saw its stock skyrocket 4,385% by mid-August, before it had even started the late-stage trials needed to secure regulatory approval. Its potential advantage is that its vaccine may be easier to mass produce than others and requires only normal refrigeration temperatures.However, the stock has pulled back from its highs as investors shifted their focus to front-runners such as BioNTech SE and Moderna Inc. Novavax is now up about 3,000% this year. The company didn’t reply to a request for comment.The stratospheric gains for the vaccine chasers have been likened to Bitcoin mania and some analysts have said that even Moderna’s nearly sevenfold surge is divorced from fundamental valuation, given future sales prospects.So far, Novavax has been backed by more than $1.6 billion in funding from the U.S. government and $399 million from the Coalition for Epidemic Preparedness. A late-stage trial has yet to start in the U.S.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.