♪ caroline: from bloomberg's road, headquarters in new york, i am caroline hyde. romaine:. i am romaine bostick sonali basak and i am sonali basak. the big car rental company raised $1.3 billion in its public debut today. shares opened down and closed down in the first day of trading, but the ipo strikes a turnaround for hertz.

chicago was put on the map and hurts. today we will focus on the thousands of locations and has an around the road in the run-up to the debut. hertz made big bets in an effort to take the company in a fresh direction, leasing in order for 100,000 teslas electrify its fleet, and reportedly rip gritting -- top -- recruiting tom brady. we will look at what he took the company to go from the brink of collapse to now, e.v. disruptor? take a look at what the executive had to say about the future of the company. >> this is a transformation of hertz. you have to look at trends, mobility, electrification, shared mobility, collected -- connected cars, autonomy.

>> we know our corporate travelers want electric vehicles to visit their clients and do business in. we know that our travelers want electric vehicles. it is a great way for them to try electric vehicles without committing. specifically, they want tesla's. >> overtime we will see all the rental car companies transition to evs pop. out that is what we believe consumers want today it is. a huge percentage of the population that once electric vehicles and we think that would only happen with increasing speed as time passes. it is a natural evolution. >> i have been a customer of hertz for a long time and i think there move to electric vehicles is super important. when tom talked about with the opportunity was for him and his business, i certainly wanted to do my best to help promote people who are changing the world in a positive way. romaine: look at that face. caroline: what kind of car do you think tom brady rents from hertz bank? romaine: i bet you, it is an suv. sonali: it will be a tesla.

[laughter] caroline: i bet it is really reasonable. do you think he is standing in line with the documents that he has to sign? romaine: he is not putting up with that. [laughter] he is pulling the bentley around. let's talk about it. caroline: we have the bloomberg deals reporter. it was a lot of bright talk from the executives. they have had a remarkable turnaround, all credit to them, but it was not a remarkable day in terms of trading. >> i look at this and i am, like, i am in a meme? or is this reality? the reason they are here is because of retail investors. at the beginning of the pandemic, they were trading really well and that kind of caused why they wanted to come back to the equity market in a more formal way, through nasdaq. sonali: i remember it wasn't that long ago when they wanted to do a stock sale in the sec

said, no way. did the retail investors lose out here? crystal: they didn't lose that much. only 10% down for the day. all the existing, all the proceeds are secondary shares and will go to existing investors. some will go to the ones that actually bought the company through bankruptcy. obviously the recovery, as real people are going back to traveling. but the first day debut is not showing all of that. romaine: a big part of that meme trade, when talking about gamestop, amc, i get there is a grand future for these companies. and hertz clearly tried to play into that. leading up to this ipo, they made this announcement about teslas which may or may not have been signed, but they clearly

wanted to get that out there before the ipo. these commercials have been playing with tom brady showing off the teslas and education of hertz's fleet. i am wondering, is this what investors want out of the company? is this what they are buying into, maybe not today, but longer-term? crystal: i think there may be a buzzword. whenever you mention -- a vehicle, it does really well with the stock. even activists are pushing retailers like macy's to do a collab with tesla. thei parking locations, that they should put in a tesla thing. whenever you mention electric vehicles. caroline: just say you are going to do an nft or collaborate with tesla. crystal: right. that suggests that this retailer should get into cryptocurrencies. caroline: we are in a meme,

people. crystal: and tom brady's faces all over the place. romaine:. romaine: do you drive and ev? crystal: i do not. [laughter] romaine: how do you get across the bridge? on your scooter where am i going to park my e.v. in new york city? [laughter] romaine: in all seriousness, what is the next step? obviously this money did not go directly to the company, it went to the investors. there is a sense financially that this company has found of a good place, a better place than where they were year and a half ago when everybody thought it was the end of hertz. ra in a better financial position where we start to see operating performance and not just talk of drops with macy's, whatever? i am waiting for the off-white version of the hertz tesla? crystal: yeah.

romaine: it is cool. i see where we keep you around. [laughter] sorry, go ahead. you can't get derailed by my derailment. crystal: that's right. what would be interesting is whether we will see an actual equity fundraising coming from them. they do have to pay for these tesla cars, 100,000 of them. we don't know when they will be delivered or when he would place the order. whether that would be further down the road. it will be interesting to watch. caroline: quick-witted with the mic drops. crystal tse, thank you. coming up, we discuss what the investors that snapped up hertz stock at pandemic lows. it is wild. romaine: e-shaped recovery.

remember, we used to talk about v's? what is that? caroline: that is your left to uber in alabama. this is bloomberg. ♪

caroline: today we are focused on the hertz listing. and romaine, you are looking at a pretty dramatic chart. romaine: we laughed a lot when i year or so ago everybody thought this would potentially be a bankruptcy case. looking at the price of hertz bonds, these are the issues,

they defaulted on a couple. this is one where folks were able to buy into this at less than $.10, and you can see there was a big payoff. this was the mother of all dips. you had to have nerves of steel to buy, into this because people thought this was a done deal. but this was really about the pandemic even if there was a weakness in this company prior to the pandemic. but at the end of the day we are all going to rent cars and at some point this company would -- caroline: the retail investor called it. carl icahn did not. romaine: wow. did you just through shade at carl icahn? [laughter] caroline: he sold out at the very bottom. we should have trusted some of those investors. romaine: the retail trade and definitely got it right this time. let's bring in our next guest and see what she has to say. bloomberg intelligence analyst jodi lori. let's talk about.

you go back to those bonds, they were circling the drain. a lot of folks looked at that and saw a buying opportunity. some of this was the hard-core distressed investors who know a bargain when they see it, but there were other folks that may be were not experienced, but really just had a gut feeling that there was something wrong here, this was an oversold company, and there was opportunity to be had here. >> right. so you have to take a step back and remember the narrative leading into the pandemic. what was interesting when we had the ceo and the private equity investors on earlier today, they were talking about the fact that they were trying to appeal to what the customers want in terms of electric vehicle fleet. a few years ago the narrative was opposite. it was a mismanagement of the fleet. they had a tremendous fleet but it was not what investors wanted or what customers wanted. now we are in a scenario where

the fleet is much smaller, used-car prices are giving them tremendous tailwinds. so they have residual value in these used cars on their lots. of these factors are at play that are creating a much more favorable story than what we thought would happen pre-pandemic. sonali: was hertz a real once-in-a-lifetime opportunity? when was the last time you saw a return like this for a distressed investment? and could we see it again? jody: sure. the distressed market is a weird one. the hertz story is unique, particularly the meme element to it that really drove equity. but there have been scenarios -- there was a shipping company about 10 years ago that was written off, bonds were trading at $.10 on the dollar if that, and there was a favorable court ruling that caused them to trade

so that you would get interest on interest for what you lost during the bankruptcy. so there are scenarios like that, but they are few and far in between. most bankruptcy situations do not end this favorably. caroline: this time, many a distressed investor is wringing their hands because we are so flush with cash in the economy and money being put to work everywhere that, nothing is being allowed to fall into the distressed category. where could we see it? where are the rich pickings at the moment? jody: if you had asked me a year ago, my answer would have been a lot different. i cover athleisure, lodging, gaming and restaurants. that area has certainly been a little bit challenged by the pandemic. you coming to 2021, people are revenge spending. there is pent-up demand. even in my area where i could have picked one or two names that i would say, i don't know how they will do, even they are benefiting from this environment. there is a joke within the

bloomberg distressed chat that we do, everyone says distressed, what is distressed anymore? nothing is trading at distressed coupons. nothing is providing that risk-return trade-off that distressed investors like to see. romaine: great point. i guess part of that has to do with the distortions. some of the support. at least implicit,, with regards to some of the corporate debt out there during the pandemic. i am wondering if in a different time, if this had been a financial crisis that had occurred prior to the pandemic, a financial crisis that occurred with maybe not record low rates out there by the fed, that maybe there would not have been enough confidence in buying into this. and i am wondering what happens when we start to get a normalization of policy. is this basically a one-off? jody: so i think that goes back

to the conversation about at what point do rates rise? i am not as capable as our strategy team to talk to that point, but i will tell you that i do think we are in this weird environment, and we have been since the prior recession, the 2008 recession, where interest rates have been going lower. we are in this weird stalemate. investors are flush with cash and saying, where do a put this money? if you look at credit spreads, for instance, ccc's they's have been really giving you no additional return, no additional value beyond higher-rated companies. so you say, when will this shift? at what point do we get this situation where it goes from supertight to worrisome, about these lowest rated stocks. i don't know if we are there yet. we have seen this narrative over

and over and over again. it was the pandemic most recently. before that we had discussions around the debt ceiling, trade in china. we have this the scenario where -- we have seen this scenario where it gets tighter, and that it stretches. romaine: and what happens to those preferred shares? jody: they have favorable to a preferred holders, the dividends really tick up dramatically. management hinted with the ipo that they would take those out either through cash or debt. it might be dead, but nobody knows anymore. they do have $3.5 billion in cash, so they could use cash. i would think they would try to tap the markets now. romaine: alright, jody lurie, bloomberg intelligence credit

analyst. coming up, we will talk about hertz, the meme stock, and the stock. our next guest is grant feek, ceo of the online car marketplace trek. this is bloomberg. ♪ -- the online car marketplace tred. this is bloomberg. ♪

caroline: hertz returned to the public market in terms of equity. part of this turnaround is because it started selling its cards. remember, secondhand cars are elevated in prices due to supply chain issues. we will dig deeper into the business model surrounding this. grant feek is the ceo of t red, a peer to peer online car marketplace which is, of course, having its moment in the the prices are elevated. even raising some money on the back of this.

25 million dollars series b funding. how has the market been for you? grant: it is funny you mentioned the sun, because there is currently a monsoon passing through seattle. caroline: i't it always raining there [laughter] grant: 11 months the year. the markets are pretty wild. never seen anything quite like it. we have seen valuations on a lot of models up as much as 50% in the last year. 45% in the last few months. it is a wild time to be buying and selling these cars. sonali: i am interested in the appeal to younger and newer customers. you are preparing to accept bitcoin as a form of payment soon. houseman can that happen? what evidence do you have of a higher option rate of that? grant: our retail is peer-to-peer. today it is maybe 30% to 50%.

it is hard to judge the size exactly because a lot of it is a bit shady. we are trying to organize that market. but also, grow their share by creating a way in which people can buy and sell using their phones. by doing that, it would be a year or two instead of every 10 years. crypto-currencies such as bitcoin really fit that. there are a lot of people that really want to use it. we see that jiving with our whole push to make it as easy as possible to buy and sell a car. romaine: let's focus on the future of the car world. what you guys are doing at tr is great. e a car the traditional

way is awful. -- what you guys are doing at tred is great. buying a car the traditional way is awful. you have moved to peer-to-peer. we have yet to see that with new cars for a wide variety of legal and regulatory reasons. do you envision a future here where if i want to buy a car, i can just buy a car and not deal with a lot of the hassle that we deal with right now? grant: absolutely. on the use aside, as you pointed out, it is easier to innovate because the rules are less stringent around used cars. i think what you will see over the next three to five years in the new-car space is a number of car companies looking to replicate the carvana or the amazon buy from home experience,

and enable traditional dealerships to transact that way. without naming names, a lot of the partners we work with, a lot of businesses are looking for ways to make it easier for dealers to enable that transaction. i think you will see that a change in droves in the near future. caroline: i don't know how granular you can get, but we were talking about how ridiculously anything remotely related to electric vehicles at the moment seems to add a huge amount to your market cap. when we heard hertz would be buying or purchasing teslas,. is everyone interested in the e.v. space? grant: they are worried that if i buy into the technology now, maybe in five years it will be completely relevant now and the value have depreciated. but we have also other people who are only purchasing those

sorts of vehicles. we are excited. electric vehicles tend to sell really well in our marketplace because we are pretty tech forward, and people who buy those vehicles are pretty comfortable with technology. caroline: great to have some time with you, grant feek. congratulations on the fundraise. look forward with speaking to you again soon. ceo of tred. you can do no harm when it comes to electric vehicles. romaine: i think you will be sticking around to host another show. we just got reporting out of crystal, they were looking to price above $74 a share. sonali: not so much money going into hertz today, even with that e.v. love. romaine: that is certainly a longer-term story, maybe it gets turned around. when you talk about e.v. as a buzz word and how it gets

attached to everything, it works. . there is a reason why hertz rolled those commercials with teslas. caroline: and tom brady. romaine: was tom brady in that commercial? i didn't see. [laughter] i was blinded by his beauty. caroline: you only saw the ad about a hundred times. this is bloomberg. ♪

>> from the heart of where innovation, money and power collide, in silicon valley and beyond, this is bloomberg technology with emily chang. ♪ caroline: i am caroline hyde in for emily chang and this is "bloomberg technology." coming up, bitcoin soares and coinbase slumps. third-quarter results missed wall street estimates.