What happened

Investors in Hertz Global Holdings (NYSE:HTZ), which filed for Chapter 11 on Friday but then doubled its share price on Wednesday, are getting thrown for another loop this morning.

In early trading -- at 10:10 a.m. EDT -- Hertz stock is down 12.2% on news that activist investor Carl Icahn has just sold his entire stake in Hertz.

IMAGE SOURCE: GETTY IMAGES.

So what

Over the weekend, The Wall Street Journal noted that "equity holders rarely survive a bankruptcy" such as the one that Hertz is currently undergoing via Chapter 11 proceedings. In the newspaper's estimation, therefore, Hertz's bankruptcy held the potential to cost Icahn his "entire" investment in Hertz.

According to SEC filings in March, it cost Icahn some $1.88 billion initially to build up his stake of 55.3 million shares. Yesterday, the investing icon revealed in a different SEC filing that he had just sold all 55.3 million of those shares at an average price of $0.72 apiece, receiving just $40 million in return.

Now what

What would it take to convince Icahn to accept a -98% return on his investment in Hertz and abandon ship? Nothing less, I fear, than the belief that waiting any longer would have resulted in a 100% loss as the recession dragged on.

In his filing yesterday, Icahn stated that even though he has sold his equity position "at a significant loss," he still does "continue to have faith in the future of Hertz" and believes that "based on a plan of reorganization that includes new capital, Hertz will again become a great company." But today, investors are focusing on Icahn's actions rather than his words -- and imitating those actions by selling their Hertz stock.

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