A tweet from Barbarian Capital showing the legal filings to the SEC to allow the sale of new stock

Bankruptcy court Judge Mary Walrath set a hearing for today to determine whether bankrupt rental-car company Hertz can issue nearly 250 million new shares of common stock it hopes will fetch around $1 billion.

Why it matters: Shares of bankrupt companies are typically worthless, except in rare instances where a company can repay its debt in full and money is left over for equity holders.

  • But Hertz has become a darling of the stock market in recent weeks with its shares rallying from 56 cents on May 26 to $5.53 on Monday (before falling back to $2.06 Thursday).
  • It may be the finest test of the greater fool theory ever conducted.

What they're saying: “The recent market prices of and the trading volumes in Hertz’s common stock potentially present a unique opportunity," the company’s lawyers said in a filing.

What others are saying: Jared Ellias, a law professor at UC Hastings College of Law, saw things slightly differently.

"This is outrageous. These directors likely know that the stock is worthless and instead of trying to stop uninformed investors from gambling on a dead stock, they are selling into the market."
Jared Ellias on Twitter

Of note: Hertz trades on the New York Stock Exchange, which has moved to delist the company.

Go deeper

More firms throw weight behind new Wall-Street backed stock exchange

Photo: Carl Court/Getty Images

Goldman Sachs and JPMorgan are joining the list of banks, brokerages and trading firms that back the Members Exchange, or "MEMX" — a new stock exchange that says it will go live in July and challenge incumbent exchanges by charging lower fees.

Why it matters: MEMX, which is still awaiting regulatory approval from the SEC, could be a formidable competitor to the entrenched "big three" stock exchanges.

Updated 1 min ago - Science

Hurricane Isaias makes landfall in North Carolina

People walk through floodwaters on Ocean Blvd. in Myrtle Beach, South Carolina, on Monday. Photo: Sean Rayford/Getty Images

Hurricane Isaias made landfall as a Category 1 storm near Ocean Isle Beach in southern North Carolina at 11:10 p.m. ET Monday, packing maximum sustained winds of 85 mph, per the National Hurricane Center (NHC).

What's happening: Hurricane conditions were spreading onto the coast of eastern South Carolina and southeastern N.C., the NHC said in an 11 p.m. update. Ocean Isle Beach Mayor Debbie Smith told WECT News the eye of the storm triggered "a series of fires at homes" and "a lot of flooding." Fire authorities confirmed they were responding to "multiple structure fires in the area."

Updated 58 mins ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 12:30 a.m. ET: 18,224,253 — Total deaths: 692,679 — Total recoveries — 10,865,548Map.
  2. U.S.: Total confirmed cases as of 12:30 a.m. ET: 4,713,500 — Total deaths: 155,401 — Total recoveries: 1,513,446 — Total tests: 57,543,852Map.
  3. Politics: White House will require staff to undergo randomized coronavirus testing — Pelosi says Birx "enabled" Trump on misinformation.
  4. Sports: 13 members of St. Louis Cardinals test positive, prompting MLB to cancel Tigers series — Former FDA chief says MLB outbreaks should be warning sign for schools.
  5. 1 🎥 thing: "Tenet" may be the first major film to get a global pandemic release.