In a recent filing with the SEC, Hertz Global Holdings, Inc. (NYSE:HTZ) announced that the company has identified errors while filling its 10-Q report for the first quarter of the year. The errors are referring to the allowances for doubtful accounts in Brazil, uncollectible amounts with respect to renter obligations for damaged vehicles and restoration obligations at the end of facility leases.
In this way, the Audit Committee of the Board of Directors has stated that the financial statements for 2011 should be restated and the statements for the following two years also have to be corrected for errors. ” However, because of the above mentioned errors, the Audit Committee has directed the Company to conduct a thorough review of the financial records for fiscal years 2011, 2012 and 2013, and this review may require Hertz Global Holdings, Inc. (NYSE:HTZ) to make further adjustments to the 2012 and 2013 financial statements,” the filing added.
Following the identification of these mistakes, the Audit Committe considers that at least one material weakness existed in Hertz Global Holdings, Inc. (NYSE:HTZ)’s internal control over financial reporting and that disclosure controls and procedures were ineffective for the end of the last year.
On the back of this announcement, the stock price of the company slumped by over 10% on Friday morning. Interestingly, several investors have boosted their stakes in Hertz Global Holdings, Inc. (NYSE:HTZ) during the first three months of the year. For example, Jeffrey Tannenbaum‘s Fir Tree has surged its position by over 160% over the quarter to 13.82 million shares. Larry Robbins‘ Glenview Capital have initiated a stake in the company, reporting 13.26 million shares in its latest 13F filing.
York Capital Management, led by James Dinan, and David Cohen and Harold Levy’s Iridian Asset Management also own significant positions in Hertz, reporting ownership of 11.87 million shares and 8.54 million shares respectively. Billionaire Dan Loeb is also among the hedge fund managers hit by Hertz.
Earlier last month, Hertz Global Holdings, Inc. (NYSE:HTZ)y issued over 10.12 million shares of its common stock, on the back with the conversion of around $83.84 million of its 5.25% Convertible Senior Notes due 2014.