Hertz sold $29 million in stock despite SEC questions

New York(CNN Business) Hertz did raise millions of dollars through stock sales after its bankruptcy filing, after all.

The cash-strapped car rental company had said it would stop the stock sale after the Securities and Exchange Commission had raised questions about the deal. But apparently it did sell some shares before the SEC took action.

It's been quite a back-and-forth deal.

When Hertz filed for bankruptcy in May, its stock value was set to be wiped out even though the company hopes to stay in business. But investors -- primarily day traders -- drove up the value of the stock more than 1,000% in the weeks that followed.

That led Hertz to announce plans to sell up to $500 million of additional shares to raise the cash it needed to see it through the bankruptcy process. A bankruptcy judge approved the plan for the stock sale, but the SEC then said it was looking into the situation.

But late Monday, Hertz disclosed for the first time that it had sold 13.9 million shares for more than $2 each before the SEC took action. That raised $29 million.

The investors who bought those shares have not fared well. Shares of Hertz closed Monday at $1.69, which was up 12% on the day. But those new shares were still down 19% since Hertz's stock sales. The stock was down 5% in premarket trading Tuesday.

And Hertz warned in the same filing that all of its shareholders will almost certainly be wiped out as part of the bankruptcy process. That is typically what happens during a bankruptcy.

While some investors were eager to buy the shares even after the bankruptcy filing, many executives at Hertz have sold their stock since the bankruptcy filing. And its primary shareholder, Carl Icahn, sold all of his stock days after the filing and took a $2 billion loss on his investment.

The company also disclosed that revenue fell 67% in the second quarter, and that it lost $847 million in the period.

It said car rentals have improved modestly as air travel has picked up from its low point in April. But the biggest improvement in conditions since its bankruptcy filing has come from the improved market for used car sales. The company said its fleet of vehicles was down nearly 30% from year-ago levels as it sold cars to raise cash.