HTZ Borrow Cost Climbs Again as Earnings Loom

Hertz Global Holdings heads into its November 5 earnings date with borrow costs re-accelerating, short interest near a multi-month high, and options traders rotating toward calls for the first time in weeks.

The borrow story is the one that keeps moving. Cost to borrow has climbed back to 116% APR as of October 27, up 36% on the week. That follows a brief retreat from the 190% peak hit on October 22, with the rate touching 103% as recently as Monday before turning higher again. The previous note framed the question as whether the borrow market would normalise. The answer, so far, is no. Through September and the first half of October, borrow costs ran between 6% and 14%. The current level is still roughly nine times that baseline, and the trend since mid-October has been consistently higher. Availability remains at 0%: every share in the lending pool is lent out, and no new supply has appeared. There is no room for new shorts to enter the trade at anything close to the rates that incumbents locked in earlier in the quarter. ORTEX puts the short score at 84.9, its highest reading in the current series and up from 77.5 just eight trading days ago.

Short interest itself has barely moved. ORTEX estimates 124.8 million shares short as of October 27, equivalent to 40% of free float. That is up roughly 5% over the past month but flat on the week. FINRA's fortnightly count, settling October 15, put official short shares at 126.6 million, implying days-to-cover of 5.9. The structural position has not changed: the short is large, entrenched, and increasingly expensive to hold. Options positioning, by contrast, has shifted. The put/call ratio has fallen to 0.82, a full standard deviation below its 20-day average of 0.91 and well below the readings above 1.0 that held through most of late September and early October. The drop suggests call buying has picked up relative to puts, a change in tone if not yet a reversal.

The analyst picture is uniformly cautious, with every recent move pointing downward. Morgan Stanley's Adam Jonas cut his target to $2.50 on October 15, the most recent action on the stock, maintaining Equal-Weight. Goldman Sachs holds a Sell with a $2.00 target. Barclays carries Underweight at $1.00. The consensus mean sits at $2.13, barely above the current $1.99 price, offering little implied upside against a backdrop of negative earnings yield and a price/book ratio that is itself negative at around minus 1.1. EV/EBITDA of nearly 40x is elevated for a company losing money. The ORTEX short score ranks in the first percentile of the universe on short metrics, and the utilisation rank is at zero.

The ownership picture adds an important structural note. Knighthead Capital, operating through CK Amarillo LP, holds 50.9% of shares as a Schedule 13D filer, an active position that has been on the register since March 2025 and was most recently amended October 21. That concentration means a large fraction of the float is effectively locked up, which helps explain why availability has been at zero for so long. BlackRock filed a fresh 13G/A on October 27, showing a 3.3% stake. As always with 13D/G filings, stakes are as-last-disclosed around the 5% threshold, and holders dropping below that level may exit without a further filing.

The August earnings print is the only useful historical reference point for what the stock can do around a report. After Q2 results on August 6, the stock jumped 45% in a single session and was up 50% over the following five days. That move reset borrow costs, which briefly spiked to around 28% before collapsing. The current setup is structurally different: borrow costs are running at four times that post-August spike level even before the print, shorts have not meaningfully covered despite months of rising carry costs, and the ORTEX short score has reached a new high. Whether that combination produces another violent relief rally or confirms the bears' fundamental thesis is the question November 5 will answer.

What to watch between now and the print: whether borrow costs hold above 100% or accelerate again toward the October 22 high, and whether the options market's recent tilt toward calls continues to build or reverses as the date approaches.