Hertz (HTZ) shares fell 11% Monday morning, and last week’s RALLY returned profits after Bill Ackman hedge fund gained a key position in the car rental giant.
Ackman, CEO of Pershing Square Capital Management, shared on social media that his company built a 19.8% stake in Hertz after accumulating stocks since the end of last year.
Hertz Stock spiked Wednesday after Pershing Square revealed 12.7 million shares and fueled investor speculation about the high-profile fund’s views on struggling companies.
The rental company reported a loss of nearly $2.9 billion in 2024. Hertz began purchasing in 2021 to continue competing with the industry, due to vehicle depreciation and falling prices for electric vehicles.
Ackman believes the company is benefiting from car rates, which could raise used car prices in the near future. Other automakers like Audi and Volkswagen (VWAGY) have pledged to suspend imports to avoid paying a 25% tax.
According to Ackman, that would be a boon for Hertz. It owns over 500,000 cars with a chemistry of about $12 billion. A 10% increase in used car prices could lead to an increase of $1.2 billion in the company’s automotive assets alone.