Hertz Stock Rips As Activist Investor Bill Ackman’s Pershing Square Discloses 4.1% Stake

Shares of Hertz Global Holdings Inc. (HTZ) rocketed nearly 19% by Wednesday afternoon after activist investor Bill Ackman’s Pershing Square Capital Management disclosed a significant stake in the company.

Pershing Square said in a 13-F filing with the U.S. Securities and Exchange Commission (SEC) that it picked up 12.7 million shares of Hertz, accounting for nearly 4.1% of the company’s outstanding stock.

This comes at a time when Hertz stock has struggled—prior to Wednesday’s surge, the car rental company’s shares were flat year-to-date. Over the past 12 months, the Hertz stock has fallen by over 34%.

Ackman-led Pershing Square is known for turning around struggling companies—its list includes The Wendy’s Company (WEN), General Growth Properties Inc., and Canadian Pacific Railway Inc.

Ackman's entry could be a sign of confidence for Hertz, which has struggled since its ill-fated bet on electric vehicles, given the activist investor’s history of conviction bets.

The car rental company announced that it had ordered 100,000 Teslas as it revamped its fleet to be more environmentally friendly.

However, its pivot to EVs and alternative fuel cars did not work out, and it had to subsequently unwind its investment, forcing it to take a $195 million hit in the first quarter of 2024.

The company also increased the pace of unwinding its EV investment by upping the number of EVs held for sale in 2024 to 30,000 from 20,000.

According to Stocktwits data, Hertz missed Wall Street’s earnings estimates in all four previous quarters while meeting revenue expectations in only one of them.

The company is also facing a $272 million claim from bondholders who invested in it when it filed for Chapter 11 bankruptcy in May 2020, during the peak of the first wave of the COVID-19 pandemic.

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