Billionaire investor Bill Ackman has made a surprise move into the car rental world — and investors are paying attention.
Pershing Square Capital Management, led by Ackman, has recently acquired a significant 20 percent ownership stake in Hertz. Ackman is optimistic about the potential rise in value of Hertz’s impressive fleet of 500,000 vehicles, anticipating that as used vehicle prices surge due to President Trump’s auto tariffs, the company’s assets will appreciate.
‘Hertz is uniquely well-positioned in the current tariff environment,’ Ackman said in the X post.
‘Hertz possesses a fleet valued at around $12 billion, consisting of half a million vehicles. An uptick of 10 percent in the prices of pre-owned cars could result in a remarkable $1.2 billion increase in the value of its automotive assets — nearly half of the company’s current market capitalization.’
While Hertz has encountered significant challenges over the years, particularly in its airport and vacation location operations, Ackman’s investment is viewed as a strong show of faith in the company. This move has caught the attention of many investors, portraying a sense of confidence in Hertz’s future prospects.
Since news of Ackman’s stake first emerged, the share price has doubled to $8.22. Ackman bets shares will rise to $30 by in four years.
Famously, traders have watched every move made by Warren Buffett, the most famous investor of all time. His recent purchase of Sirius XM sent shares skyrocketing.
Increasingly, they are looking to the next generation — and Ackman, worth $7.7 billion, is high on that list. He is known for bold bets, having made fortunes by shaking up companies like Canadian Pacific and Wendy’s.
Bill Ackman, a billionaire investor, sent stock prices shooting up after reporting buying Hertz stocks
The share price of Hertz has doubled in the past few days after Bill Ackman announced he had bought a stake
Ackman has also made headlines for both criticizing and later praising President Donald Trump’s trade moves.
The rental company, known for its giant highlighter yellow signs and A-list sponsored commercials (Tom Brady and OJ Simpson have both been official spokespeople), has lost millions of dollars in several consecutive quarters.
In 2020, the company filed for Chapter 11 bankruptcy as the pandemic kept would-be vacationers locked in their homes.
The company emerged from bankruptcy in 2021 with a new strategy focusing on EVs and environmental stewardship.
It pledged to buy 100,000 Teslas, attempting to build a forward-thinking fleet of vehicles. But the company’s EV bet has largely gone bust. Cars in its fleet rapidly depreciated and vacationers were not enthusastic about navigating American charging infrastructure during their travels.
The company reversed course, ditching its EV push and selling off a large chunk of the fleet into late last year, which triggered a nearly $200 million writedown.
Customers found a raft of former Hertz Tesla rentals selling for less than $20,000 a pop.
This means the cars, which have a base price in the mid-$40,000s, lost more than 50 percent of their value in three years.
Warren Buffett – who is 94 – has a 35 percent stake in Sirius XM
The company’s stock price jumped over 40 percent on a day when much of the market remained mixed
Hertz has struggled in recent years after emerging from bankruptcy in 2021
Hertz appointed Gil West, former chief operating officer of Delta Air Lines, as CEO in April 2024
Losses in other operations have continued, too.
Hertz has posted negative earnings in recent years, and its debt load has crept higher.
Even though Hertz’s stock price dramatically rose on Ackman’s disclosure, many signs still point to trouble.
Some of the company’s debt still trades for much less than their full value, which suggests investors don’t believe the millions owed will be repaid.
Also, nearly half of the stock that can be traded is currently being shorted.
That means many investors are holding bets that Hertz’s value will continue to falter.
