We’re auctioning off stock history as NFTs to participate in the future of finance

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Fearless girl stands up to the old way of investing just as Markets Insider explores the future.

  • Markets Insider is selling its first NFTs
  • We want to participate in the future of finance that we so often cover, and connect more with our audience
  • Gamestop, Hertz, and AMC are the first three we are auctioning
  • See more stories on Insider’s business page.

Investing has changed a lot in the past year, and Markets Insider has tracked every twist and turn. We are so far past calling a stockbroker on a telephone and shouting orders on the NYSE floor that even bringing them up as examples can date you.

Markets Insider likes to consider itself part of that evolution. We were born only four and a half years ago, and have found success covering the markets for a digital-native generation of traders. Our written coverage constantly shifts to focus on what you tell us you want to read, and our data pages respect the time it takes to research stocks by putting the most important information at the top.

We’ve loved covering and observing the shifting financial markets from the sidelines, and now we think it’s time to jump in with our audience. We want to allow you, and all the other people who use Markets Insider on a regular basis, to OWN a piece of this generational shift in trading.

Starting next week, we will be auctioning off seminal moments of this shifting stock history on Open Sea, allowing you to bid on the future of trading.

Reddit traders short squeezing the hedge-fund establishment, AMC’s silverback CEO leaning into shareholders as fans, and the SEC keeping traders out of a good bet on Hertz all come to mind as seminal moments in stock history that will shape trading and regulation for years. That’s why we’ve picked these three moments as our first round of auctions.

Each of these moments will be sold as individual NFTs. The NFT will include a historical record of the moment and an explanation of why it matters. We also commissioned three new pieces of art from our world-class graphics team to accompany the auctions. By winning the auction, you’ll be able to brag about owning a seminal trading moment on the fastest growing and most digitally savvy markets site on the web.

These NFTs will not only allow us to interact with you, our audience, but it also lets us participate in the revolution. Quite frankly, we want to live into this new reality and know what it’s like to have cryptocurrency on our company’s balance sheet.

Some Details on the Auctions

The three moments we are auctioning will go live on Open Sea on Monday August 2nd, and you will be able to bid on each of the auctions individually.

We are also hosting an AMA on Reddit to answer any questions you may have about the NFT process and how we decided on these historical moments. That will happen today (Wednesday July 28) at 3pm EST.

We’ve loved chronicling the rapid changes taking place in the investing industry, and we are even more excited to be more involved in its future. This is just one small step in that direction. And one that we hope to take with you.

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How Hawaii’s rental car crisis became so dire tourists are renting U-Hauls instead

Hana Highway, Hawaii.
The Hana Highway in Hawaii.

  • Hawaii is currently stuck in a glaring rental-car nightmare as Americans start to travel again.
  • Rental vehicle prices are skyrocketing, and some tourists have turned to booking U-Hauls instead.
  • Take a look at how the Aloha State found itself in such a dire situation, and how you can avoid it.
  • See more stories on Insider’s business page.

Take a look at Hawaii’s rental car industry right now and you might see something quite peculiar.

Booked out rental cars. Vehicles renting for $700 a day. Tourists driving fleets of U-Haul vans instead. The state asking tourists to book rental cars before making any other vacation plans.

Hawaii’s islands are in the middle of a glaring rental-car nightmare. And now, renting a vehicle – in the Aloha State and other parts of the US – could consume the bulk of tourists’ vacation costs.

“People are quickly realizing that they need to take the cost of the rental car into account because it’s no longer just an add-on,” Jonathan Weinberg, the founder and CEO of AutoSlash, told Insider in April. “It literally could be the majority cost of your trip, so folks who are planning things last minute are unpleasantly surprised by it.”

So how did the Aloha State get here? The answer lies within computer chips, COVID-19, auctions, and “revenge vacations.”

How it started

hertz
A Hertz office in New Jersey in May 2020.

To understand how the national rental car shortage has impacted Hawaii, let’s go back in time to mid-2020.

As we all now know, the COVID-19 pandemic devastated the majority of the travel industry, including the rental car companies.

In the midst of the pandemic, companies like Hertz – which later filed for Chapter 11 bankruptcy protection – and Avis sold off chunks of their rental-car fleets. At the time, this decision may have helped save cash, but it’s now, unsurprisingly, at the root of this massive rental vehicle shortage.

On top of this, companies are now struggling to regrow fleet sizes as a result of shockingly high used car prices and a lack of new cars due to the global computer chip shortage. Companies like Hertz have evn to turned to “supplementing fleets by purchasing low-mileage, pre-owned vehicles from a variety of channels including auctions, online auctions, dealerships, and cars coming off lease programs,” a spokesperson told Insider in May.

But while rental car companies are scrambling to rebuild fleets, travel is beginning to skyrocket again.

“When we look at our travel numbers, travel bookings in May were 95% of where they were in May of 2019,” Steve Squeri, American Express CEO, told CNBC’s Jim Cramer on “Mad Money” on Monday.

Hawaii specifically has seen a massive rebound in travel, and more people are now traveling to the state than before COVID-19, KITV, an ABC affiliate in Hawaii, reported on June 14. In the week preceding the report, 36,000 people on average traveled in and around the islands every day, according to KITV. To compare, in June 2019, the average was 34,000 people.

And as you can probably tell, this skyrocketing number of travelers is now compounding the rental-car shortage.

A look at Hawaii’s dire shortage, and how you can avoid it

hawaii coronavirus caution tape
Caution tape at Hawaii’s Waikiki Beach.

Hawaii’s fleet of rental cars dropped by over 40% during COVID-19, the Hawaii Tourism Authority wrote under the “rental car shortage” section of its website.

The average car rental in Hawaii sat at about $50 daily before COVID-19. Now, some vehicles are renting at highs of $700 a day, or over two-times 2019’s prices, Chris Woronka, a senior hotel-and-leisure analyst at Deutsche Bank, told Insider in April.

As a result, some tourists have turned to renting U-Haul moving pickup trucks and cargo vans instead.

“We have seen a considerable uptick in U-Haul rentals from customers who are visiting the islands now,” Kaleo Alau, U-Haul Company in Hawaii’s president, told Insider in an email statement in April. “We realize this demand is occurring when tourists are unable to secure a rental car, or they learn that our rental fleet options are more affordable.”

Renting moving vehicles may be a quick fix for tourists, but this unusual and outside demand for U-Hauls has left some offices with less equipment for locals who may need the vehicles for actual moving purposes.

“We are working every day with our primary customer base – the islands’ residential movers – to ensure we can still meet their transportation needs,” Alau said.

Relying on U-Hauls instead of car-rental companies has become so popular, the state’s tourism agency has now had to address the issue on its website.

“The Hawaii Tourism Authority does not condone visitors renting moving trucks and vans for leisure purposes,” the agency wrote.

If you want a rental car for your upcoming “revenge vacation” in the tropical state, but don’t want to pay a few hundred dollars per day, follow the state and experts’ advice: plan in advance.

“Rental cars are in high demand, so please plan ahead to secure a reservation first before making the rest of your travel arrangements,” the agency wrote.

Read the original article on Business Insider

Wall Street Bets was right: Hertz’s bankruptcy auction will actually give shareholders a handsome payout – even after Wall Street decided the stock was worthless

FILE PHOTO: The desk of car rental company Hertz is seen at Nice International airport during the coronavirus disease (COVID-19) outbreak in Nice, France, May 27, 2020. REUTERS/Eric Gaillard

Long before GameStop and Reddit’s Wall Street Bets became synonymous, the social-media platform was enamored of another stock: Hertz.

The car-rental company became the target of Reddit-fueled traders last summer when it announced it would file for bankruptcy. Shares of Hertz spiked as much as 825% in a matter of weeks. Wall Street onlookers were scratching their heads, wondering why retail investors were scooping up shares of a company that couldn’t meet its debt obligations.

In June, retail investors who steadfastly believed that “stonks only go up” were especially excited that the billionaire investor Carl Icahn missed out on Hertz’s massive rally. Icahn had sold his Hertz position at an average price of $0.72, representing a loss of more than $1.8 billion.

“Good job guys. Hertz is now a viable company again. Carl Icahn is a clown who bought high, sold low,” a Wall Street Bets user commented last summer.

Even Hertz itself didn’t have as much faith in its stock as the retail traders did. When the company issued more shares in June, it said its stock could be “worthless.”

“We are in the process of a reorganization under chapter 11 of title 11, or Chapter 11, of the United States Code, or Bankruptcy Code, which has caused and may continue to cause our common stock to decrease in value, or may render our common stock worthless. Investing in our common stock involves a high degree of risk,” the company said in a filing with the Securities and Exchange Commission.

Typically, in a corporate bankruptcy case like Hertz’s, equity shareholders would receive nothing. In March, Hertz unveiled its reorganization plan, which said shareholders would receive no payout.

But on Wednesday, Hertz announced that it had accepted a $6 billion bid from a group of investors – Knighthead Capital Management, Certares Opportunities, and Apollo Capital Management – to exit bankruptcy. Knighthead’s plan values Hertz at about $7.4 billion including debt, according to Bloomberg. The winning bid would pay shareholders close to $8 a share.

Read more: A 29-year-old crypto billionaire who’s perfected digital-currency arbitrage shares 2 tips for investors looking to get started in trading – and explains why ether is unlikely to surpass bitcoin

As part of the Hertz proposal, institutional and accredited equity investors would be given about $240 million in cash and the chance to participate in either a $1.6 billion rights offering or warrants for about 20% of the reorganized company, Bloomberg reported.

Many of the traders who speculated on Reddit likely won’t qualify as institutional or accredited investors and therefore won’t get new shares. But their instinct about the value of Hertz’s stock turned out to be correct, even when much of Wall Street didn’t believe so.

The $8 share price is higher than what any retail investor who purchased last summer paid.

Andrew Glenn, a managing partner of Glenn Agre Bergman & Fuentes who orchestrated the winning bid, told Insider the equity payout to shareholders was “unprecedented.”

“Just six weeks ago, shareholders were going to get nothing, and now they’re getting upwards of $8 a share,” Glenn said. “That doesn’t happen every day in bankruptcy. In fact, I’ve never seen it happen.”

He added that a confluence of events had led to the success for the equity shareholders and Hertz’s valuation: the V-shaped recovery, pent-up demand for travel, and a shortage of rental cars as many companies sent their cars to the used-car market during the pandemic.

“It’s just a perfect storm that happened first gradually and then very quickly over the first quarter of this year and really the last two months,” he said. “Our clients saw that trend happening before it unfolded, they had conviction as to the valuation, and they entered into the bankruptcy and became the mouthpiece in court for the Knighthead proposal.”

Shares of Hertz extended their gains for the second day in a row on Thursday, jumping as much as 11%, to $6.36. That followed a nearly 70% surge on Wednesday.

Read the original article on Business Insider

Experts reveals the best way to avoid out-of-control rental car fees as America is hit with massive nationwide shortages

Hertz Rental Car Lot
Hertz rental cars near Detroit Metropolitan airport.

  • The US doesn’t have enough rental cars due to the computer chip shortage, smaller fleets, and an uptick in travel.
  • In extreme cases, rental vehicle prices have skyrocketed to $700 a day.
  • If you’re planning a spontaneous summer trip, your rental car could be more expensive than your flight.
  • See more stories on Insider’s business page.

A rental car could consume the bulk of your vacation budget if you don’t plan ahead, experts warn.

Airline and hotel costs are still lower than pre-pandemic prices, Nerdwallet recently reported. But right now, the US is facing a massive rental-car shortage that’s causing vehicles to either sell out or sell for high prices.

As a result, if you’re planning a spontaneous vacation that will require a rental car, be prepared to pay more for your vehicle than your flight or accommodations, especially if you’re looking to visit popular destinations like Hawaii, Florida, Phoenix, Arizona, and Puerto Rico.

“People are quickly realizing that they need to take the cost of the rental car into account because it’s no longer just an add-on,” Jonathan Weinberg, the founder and CEO of AutoSlash, told Insider. “It literally could be the majority cost of your trip, so folks who are planning things last minute are unpleasantly surprised by it.”

Plan ahead

car rental
Hertz.

Rental car company Hertz is already expecting “strong demand” through the summer, which could cause decreased availability in certain markets, according to an email statement sent to Insider. Enterprise echoed this in its email statement sent to Insider, adding that it has been working to grow its fleet size to address this increasing demand.

If you’re wondering how to avoid these issues ahead of your summer vacation, consider planning ahead, although you could still see prices that are double or triple the typical costs. But if you’d rather book a last-minute trip to a hotspot like Florida, be prepared to see rental car prices about five to 10 times the average.

Rental vehicles in Hawaii averaged at about $50 a day two to three years ago. Now, some are going for $500 a day, according to Weinberg. And in extreme cases, prices have even hit $700 a day, Chris Woronka, a senior hotel-and-leisure analyst at Deutsche Bank, told Insider.

enterprise car rental
Enterprise.

There’s no one specific issue that’s been causing this problem: the rental-car shortage is a result of a “perfect storm” of reasons, according to Woronka. For starters, there’s currently a rising number of travelers planning post-COVID-19 “revenge vacations.” This is then being compounded with a decreased fleet size after several car rental companies sold off parts of their fleets during the COVID-19 in order to save money.

And at the moment, any chance of increasing fleet sizes again is being hindered by skyrocketing used car prices and a lack of new cars due to the computer-chip shortage.

“No matter how much shuffling the rental car companies do with the vehicles that they have on hand, I just don’t think it’s going to be enough,” Weinberg said.

Read the original article on Business Insider

Bankrupt car-rental firm Hertz’ lenders are proposing a shakeup that would take a newly reorganized company public, report says

hertz
  • Hertz’ lenders are proposing a shakeup that would take a reorganized company public, according to Bloomberg.
  • If Hertz approves the proposal, its planned sale to two investment funds for $4.2 billion would not go through.
  • The creditor group believes Hertz has an enterprise value of $5 billion.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Hertz‘s unsecured creditors are proposing a restructuring of the car-rental firm that clashes with the company’s plan to exit from bankruptcy via a sale to two investment funds, Bloomberg reported Thursday.

As part of the planned shakeup, the lenders want to convert their holdings in the bankrupt firm into shares of the reorganized company which could be taken public, Bloomberg said, citing sources.

If the proposal is approved by Hertz’ board, the company would no longer go ahead with its planned sale to Knighthead Capital Management and Certares Management for $4.2 billion. Hertz began negotiations with potential buyers in November, according to court documents. 

The creditors view Knighthead’s bid, which values Hertz at $5.85, as too low, Bloomberg reported. They believe Hertz has an enterprise value of $5 billion and could fetch more under the group’s reorganization plan. The proposal hasn’t yet been sent to Hertz and terms aren’t fixed as yet.

Hertz did not immediately respond to Insider’s request for comment.

Among options being considered, Hertz’ stock would become public upon its exit from bankruptcy, according to Bloomberg. The company’s creditor group counts Alliance Bernstein, Bank of America, Invesco, Fir Tree Partners, and JPMorgan Asset Management among its members.

Hertz, one of the first so-called “meme stocks” in Reddit’s Wall Street Bets subreddit, gained immense popularity as its stock price grew tenfold in a matter of weeks last year. In mid-2020, the company looked to cash in on the interest compounded by the hive mind of the community. But the market eventually soured and it ultimately delisted in October. 

Read the original article on Business Insider