With snake oil, we would way that it is immoral for ANYONE to sell it. As a result, we (mostly) make it illegal too.
With Hertz stock, nobody seems willing to say that all sales of such stock are immoral. And certainly they're not illegal; people have been buying and selling an enormous volume of Hertz stock.
But even if I say -- Hey this is snake oil don't buy it, I'm still not able to say Snake oil. See 'Radioactive weight loss pills! *contains to radioactive materials'
Snake oil is intrinsically bad. We all agree it's bad, and thus, nobody is allowed to sell it, even if they disclose that it is snake oil.
But Hertz shares are apparently not bad. We're clearly happy to see people buying and selling them. Before, during, and well after Hetz's abortive at the money offering, thousands and thousands of people were selling Hertz shares, and I haven't seen anyone suggest they should have been prevented from doing so.
In fact, it seems like the only entity we, as a society, seem to feel shouldn't be allowed to sell Hertz shares is Hertz. Which would be really strange if Herz shares were, metaphorically, radioactive, no?
Selling snake oil is illegal and immoral because it misrepresents the product.
Selling stock, when you make it clear that your stock is worthless does not misrepresent the product.
And, again - note that Alice is not even required to make such a disclosure, when selling her stock to Bob. The assumption on the stock exchange is that as long as public companies are up front and honest about their financials, it's Bob's responsibility to not buy stupid, overpriced crap.
