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Hertz, the Original Meme Stock, Rewards Its True Believers

When shares of Hertz Global Holdings Inc. soared after the company filed for bankruptcy a year ago, finance professionals reacted with a mix of confusion and scorn. Stockholders routinely get wiped out in bankruptcies, so who would put money into a stock like that?

Zack Konovitch would. The 33-year-old real-estate broker from Brooklyn, N.Y., said he invested in Hertz near its low point in 2020.

A year later, small investors who bet on the company in its distress are getting the last laugh. The century-old rental-car giant is poised to mint big gains for loyalists on its way out of bankruptcy. It’s a result that seemed unfathomable when its business unraveled early in the Covid-19 pandemic and another marker of an upside-down year in markets.

Mr. Konovitch said he is up about $15,000 on his Hertz bet. “I always thought someone was going to come in and buy them out” because the company is one of the biggest rental-car providers, he said.

On Friday, a bankruptcy court approved a winning auction bid that will hand control of Hertz to institutional investors who won a heated competition to buy the company out of bankruptcy as its prospects brightened. Hertz expects stockholders to receive more than $7 a share of value out of the deal, and perhaps as much as $8 a share, as the company emerges from chapter 11.

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