Making so much money so quickly seems impossible. But let me show you how Hertz's owners can quadruple their investment even though the Street values the company at only about 25 percent more than they paid for it. It's all about borrowing lots of money while taking your own money off the table. Ready for the ride? Fasten your seat belt.
The three firms' clients paid $14.9 billion for Hertz last December. But they invested only about $2.3 billion of their own cash, with Hertz taking on $12.6 billion in debt. If Hertz sells stock in the IPO at $17 a share -- the middle of the projected price range -- the company would be valued at $18.4 billion: $12.9 billion in debt, plus stock valued at $5.5 billion.
On the surface, this doesn't produce anything like the profits I've talked about. But watch. As part of the wheeling and dealing, Hertz's owners are paying themselves about $1.4 billion in cash dividends. (There's been a fuss in the press over these payments, but I'm not taking a stand on them -- I'm just counting money.) Subtract that from the $2.3 billion initial investment, and they've got only about $900 million invested. At $17 a share, their Hertz stock will be valued at $3.9 billion -- producing a $3 billion pre-fee paper profit.

Allan Sloan - Hertz on the Street - washingtonpost.com