 When it comes to Hertz NYSE:HTZ, its difficult to know where to start. But bankruptcy is a pretty good place to start when it comes to assessing Hertz stock.Source: aureliefrance Shutterstock.com It may seem like a no-brainer that a bankrupt company is a terrible investment. But feedback I got from readers when Hertz rallied 521 in a week in early June highlighted just how little some investors seem to understand about what bankruptcy means and how it typically plays out for investors.In a nutshell, its likely Hertz stock is worth zero.InvestorPlace - Stock Market News, Stock Advice Trading Tips Hertz Stock BankruptcyOne thing Ive heard from Hertz stock bulls is that companies often survive bankruptcy and thrive. Companies like Hertz with valuable global brands are typically the ones that have the best chance of navigating bankruptcy. 8 Cheap Stocks to Keep on Your Short ListThere are three outcomes for investors when a company like Hertz declares bankruptcy. First, the company liquidates its assets and disappears. Thats the path taken by Circuit City, for example.Second, the company uses the bankruptcy process to restructure financially. Most investors know several major airlines have gone through bankruptcies in the past. Now those companies have stocks trading at multi-billion-dollar valuations. But investors need to know that the stock tickers they see trading on the market today almost always have nothing to do with the original shares of pre-bankruptcy stock.The first stock I ever bought was General Motors NYSE:GM back in 2008. I bought it on the hope GM would bounce back as soon as the financial crisis was over. Unfortunately, GM filed for bankruptcy in 2009.Today, GM has a 41 billion market cap. However, the old GM shares were delisted, renamed Motor Liquidation Company, and the ticker was changed to MTLQQ. In March 2011, MTLQQ stock was canceled and shareholders received no distribution or payment at all. New GM shares have nothing to do with the old GM shares, which dont even exist anymore and became completely worthless. I learned a costly lesson at the time that just because a company survives a crisis doesnt mean its stock wont go to zero.This delisting and relisting route is fairly common for large companies with extremely high debt loads. Hertz has a 235 million market cap and 19 billion in debt. Analyst TakeThe third possible route is that the company will settle all its debt claims and emerge from bankruptcy with remaining equity value. Thats the hope for PGE Corporation NYSE:PCG investors. But the difference between PGE and Hertz is that PGE was hit by a massive one-time liability related to California wildfires. Before that, PGEs business was stable and profitable. Hertz business and share price have been sinking like a stone for a decade. Net income is down 639 in the past 10 years, and net debt is up 89.We believe it is more likely than not that equity will not carry a meaningful residual value, Morgan Stanley analyst Adam Jonas says. Jonas has a zero base case price target for Hertz stock.Former hedge fund manager Whitney Tilson included Hertz stock in a list of bankruptcy bubble stocks back in June.Every one of these stocks isnt just likely to decline ... theyre all zeros, Tilson says. Why Did Hertz Rally In June?So, if Hertz stock really is a zero, why did it rally so hard in June? There are at least three reasons for the stocks rally. First, short sellers that bet against the stock at much higher prices took the bankruptcy filing as an opportunity to cash out of their positions. To do so, they covered their shorts by buying back shares of stock. That buying volume helped drive the stock higher, a phenomenon often referred to as a dead cat bounce.Second, that dead cat bounce created a short-term trading opportunity.This insanity is being driven by individual investors day trading and speculating like crazy, Tilson says. Day traders rushed into and out of Hertz stock in a matter of days, adding to the short-term spike in share price.Finally, Hertz stock started showing up on Robinhoods most-owned list, and its clear that a lot of investors didnt fully understand what was going on. They bought shares with only a surface-level understanding of the bankruptcy process and Hertzs financial situation.I fully believe this lack of understanding is the primary reason the stock is currently at 1.54 and not 1.54 cents. These investors will learn the hard way that another 500 rally is unlikely to happen any time soon.Sure, Hertz may follow in GMs footsteps and survive the bankruptcy. But Hertz stock is almost certainly eventually headed to zero.Wayne Duggan has been a U.S. News World Report Investing contributor since 2016 and is a staff writer at Benzinga, where he has written more than 7,000 articles. Mr. Duggan is the author of the book Beating Wall Street With Common Sense, which focuses on investing psychology and practical strategies to outperform the stock market. As of this writing, Wayne Duggan was long GM. More From InvestorPlace Why Everyone Is Investing in 5G All WRONG Americas 1 Stock Picker Reveals His Next 1,000 Winner Revolutionary Tech Behind 5G Rollout Is Being Pioneered By This 1 Company Radical New Battery Could Dismantle Oil Markets The post Do Not Buy The Dip In Hertz Stock appeared first on InvestorPlace. 