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Originally Posted by Edward64
Bold prediction about Avis and Enterprise. Not sure what your definition of "fine" is but I predict they will continue to struggle for the foreseeable future. We shall see.
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Short term sure, everyone is. Long term they just knocked out one of their biggest competitors. Their stock price is up a good deal since.
Hertz financed vehicles by using its existing vehicles as collateral. They then made the incredibly short-sighted decision to set it up so that any drop in the used car market (which decreases their collateral) would have to be made up in cash payments. When they were given the chance to fix this in March, they said no and made a statement about how they didn't think this would be a big deal.
Avis structure debt like that and thus wasn't stuck with creditors demanding a cash payment. Smart company stays in business and takes market share from the dumb company.