Hertz Stock Rocked on Bankruptcy Buzz

Reports that Hertz is seeking a government bailout to avoid bankruptcy are rocking the car rental stock

Hertz Global Holdings Inc (NYSE:HTZ) is down 10.5%, last seen trading at $5.17, amid reports that the car rental concern is seeking aid from the U.S. government to avoid bankruptcy. HTZ recently tried to buck car rental sector's selloff, however, the company is potentially looking at a budget shortfall of up to $1.5 billion in the next few months.

HTZ has been facing off with its 20-day moving average since the aforementioned rally attempt off its all-time low of $3.18 in mid-March. Today's dip, however, has Hertz trading well below the trendline. Plus, the stock is now off over 68% for the year.

This negative price action has resulted in pessimism surrounding the stock. Among the six analysts covering the security, one sports a "strong sell" rating while the remaining five say now is the time to "hold." Meanwhile, the consensus 12-month price target of $12.33 is more than double current levels, which could leave the door wide open for price target cuts, should HTZ sink deeper into penny stock territory.

Short sellers have been piling on the security lately. In the past two reporting periods short interest rose 46.9%. Now, the 26.83 million shares sold short represent nearly 19% of the stock's available float and would take almost four days to cover at HTZ's average pace of trading.