Bill Ackman, the CEO of Pershing Square Capital Management, made a bold move by taking a substantial stake in Hertz, the rental-car company that emerged from bankruptcy four years ago. This news sent Hertz’s stock soaring by 56% after it was revealed that Pershing Square had built a 4.1% position in the company by the end of 2024. Since then, Pershing Square has significantly increased its stake to 19.8% through shares and swaps, making it the second-largest shareholder in Hertz.
According to a source familiar with the matter, Ackman’s investment firm received an exemption from the SEC to delay the filing of its position until Wednesday, allowing them to accumulate more shares. This strategic move by Pershing Square indicates their confidence in Hertz’s potential for growth and turnaround.
Hertz has faced challenges over the past decade, including bankruptcy in 2020 during the COVID-19 pandemic. After emerging from Chapter 11 bankruptcy in 2021, the company made a bold decision to pivot towards all-electric vehicles, with a focus on Tesla cars. However, this move proved costly as the residual values of Teslas declined significantly, resulting in billions of dollars in losses for Hertz.
In its 2024 fourth-quarter earnings report released in February, Hertz disclosed a $2.9 billion loss for the year, with a $245 million loss specifically attributed to the sale of electric vehicles during the fourth quarter. Despite these setbacks, Hertz remains a key player in the car rental industry, and Ackman’s investment signals optimism for the company’s future prospects.
Overall, Ackman’s bet on Hertz showcases his confidence in the company’s ability to rebound and thrive in the competitive rental-car market. As Pershing Square continues to increase its stake in Hertz, investors will be watching closely to see how this strategic investment plays out in the coming months.
