Hertz Shares Skyrocket Over 10% Off of Apple News, Here’s What They Didn’t Tell You

Hertz Global Holdings, Inc (NYSE:HTZ) shares were up over 10% on the day, after some news surrounding Apple Inc (NASDAQ: AAPL) and its potentially partnership with Hertz. Now prior to that, Hertz popped, and was a sympathy play with Avis Budget Group Inc. (NASDAQ: CAR). Avis Budget Group Inc. and Alphabet Inc (NASDAQ: GOOGL) announced that they would work together on self-driving cars.

Let’s get into the news between Alphabet Inc and Avis Budget Group Inc first.

Alphabet and Avis Budget Partnership

On Monday, Alphabet’s wholly-owned self-driving car company, Waymo, would now be relying on Avis Budget in order to service and store its fleet of self-driving Chrysler vans. The company noted that over 600 vehicles would be deployed, in an attempt to support a pilot run in Phoenix, Arizona. That said, this could be one of the key revenue and earnings drivers of Avis, which was the catalyst that sent the stock higher.

According to the Bloomberg article, “Waymo, the self-driving car unit of Alphabet Inc., has reached an agreement for Avis Budget Group Inc. to manage its fleet of autonomous vehicles. It’s the first such deal in a field that’s still fledgling but exploding with partnerships. Avis shares surged.

The rental car firm will service and store Waymo’s Chrysler Pacifica minivans in Phoenix, where the parent of Google is testing a ride-hailing service with volunteer members of the public. Waymo will own the vehicles and pay Avis for its service, an arrangement that is set for multiple years but not exclusive. The companies would not share financial terms.”

Here’s a look at Avis Budget Group Inc, after this announcement.


Source: TradingView

Now, this caused HTZ to rise on sympathy. Typically, when a company in a specific industry does well or has a catalyst, the stock has the ability to dictate the performance of others in its industry. That in mind, traders who were able to figure out that HTZ and Avis Budget Group were closely related, they made off of the sympathy play.

Check out Hertz Global on the 15-minute chart here.


Source: TradingView

If you look at the chart above, you’ll notice that HTZ got a pop off of that news, but the company didn’t have any news at the time.

Let’s get into what happened later today with Hertz Global.

Apple Working with Hertz to Manage Self-Driving Car Fleet

Later that day, HTZ got another pop, after Bloomberg reported that Apple Inc. was leasing a small fleet of cars from Hertz. This cause the stock to pop significantly. However, here’s the kicker with this lease. According to some sources, Apple would only be leasing six cars from Hertz for autonomous software testing. That said, this caused the stock to pull back a bit, but Hertz still ended the day up over 10%. However, it could potentially pull back because leasing six cars does not cost too much, especially for the world’s largest company by market capitalization. Consequently, the Alphabet and Avis leasing agreement may be more compelling than the Apple and Hertz agreement.

Here’s how Hertz finished on the day.


Source: TradingView

The Bottom Line

Avis and Alphabet announced that they would be working together on self-driving cars, sending shares up around 14%. This cause Hertz to rise in sympathy, and thereafter, Bloomberg reported that Apple and Hertz inked a deal to license cars for testing self-driving technology. However, it’s rumored that Apple would only be licensing six cars from Hertz.


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