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HERTZ’S COMEBACK

In the pandemic era, there’s perhaps no company on the planet that’s seen its fortunes swing as wildly as Hertz.

Flashback to May 2020: News of Hertz’s bankruptcy filing shook Corporate America. It was one of the first household names to be taken down by the near-total standstill in travel in America. Its stock fell to 40 cents as the company sold off its fleet and restructured. The company laid off 12,000 people and furloughed another 4,000.

Fast forward to today: Hertz is thriving. It emerged from bankruptcy in June, and now it’s so flush with cash it’s plowing money into stock buybacks — a commonly used but controversial tactic for companies to reward existing shareholders by increasing the value of their stakes.

*Record scratch*

Wait, I’m sorry, but you’re telling me it still costs $300 a day for a rental car while you spend $2 billion on a buyback? That, more or less, is also Senator Elizabeth Warren’s issue.

Warren, in a letter to Hertz obtained by CNN Business’ Matt Egan, calls the company out for juicing its stock price rather than investing in inventory that could bring car-rental prices down.

Key quote: “The company is happy to reward executives, company insiders, and big shareholders while stiffing consumers with record- high rental car costs and ignoring the recent history that nearly wiped out the company.”

The outrage is understandable. Hertz reported a record adjusted profit and corporate margin in the third quarter, citing “improvements in pricing power.” That’s corporate-speak for raising prices on consumers.

In her letter, Warren cited an analyst at Jefferies who estimated Hertz was charging a daily median rental price of $114.49 in August — up by 147% from pre-pandemic levels. (Note: that was August. My earlier quip about $300 a day will be familiar to anyone traveling, or attempting to travel, for the winter holidays.)

Hertz said late Monday that it had received Warren’s letter and intends to respond.

BIG PICTURE

One of the side effects of inflation is that it makes it easier for corporations to justify price hikes, which makes consumers spend more, which fuels -— you guessed it — more inflation.

According to the Wall Street Journal, about two-thirds of the largest publicly traded US companies have reported fatter profit margins so far this year than in the same period in 2019. In other words, even as costs for raw materials, labor and transportation have increased, big corporations are offsetting those costs by raising prices on consumers.

Hertz isn’t alone in that, of course. Car and truck rental prices broadly surged nearly 40% in October from the year before, according to government data. That’s partly because of resurgent demand combined with a global computer chip shortage that’s made it difficult, if not impossible, to beef up their fleets.

But it’s one thing to raises prices to make up for rising costs, and wholly another to throw a party for shareholders that would make Kendall Roy’s 40th birthday look like a tea party.

NUMBER OF THE DAY

$3.35

Finally, a bit of relief. The national average price for a gallon of regular gas fell to a seven-week low of $3.35 a gallon on Tuesday, according to AAA. That’s largely thanks to two forces: First, the Biden administration’s intervention in energy markets is providing a supply Band-Aid. And second, more ominously: The Omicron variant set off fears of weaker demand for gasoline, jet fuel and diesel.

WHAT ELSE IS GOING ON?

  • Yet another billionaire is rocketing into space on a self-funded tourism mission to the International Space Station. Which, OK, I guess this is a ~thing~ now, like buying your own island.
  • Instagram is rolling out its “Take a Break” tool aimed at helping users, particularly teens, from going down rabbit holes that could be harmful to their mental health.
  • The United Arab Emirates is switching to a four-and-a-half-day workweek, ending at midday Friday.
  • Robinhood was one of the most hyped IPOs of the year. But since its debut in July, the brokerage’s stock is trading 40% below its offering price of $38 a share and nearly 75% off the all-time high of $85.

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