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Ackman’s Big Bet Sends Hertz Shares into Overdrive

Hertz Global Holdings saw its stock skyrocket by a staggering 56% on Wednesday after renowned investor Bill Ackman and his hedge fund, Pershing Square Capital Management, disclosed a massive stake in the once-struggling car rental company. The move has sparked renewed interest in the stock and placed Ackman as a pivotal force in Hertz’s potential turnaround story.

From Bankruptcy to Billions: Ackman Steps In

According to a regulatory filing, Pershing Square initially held a 4.1% stake in Hertz as of December 2024. However, sources familiar with the matter revealed that the fund has quietly increased its position to a commanding 19.8% using a combination of direct share purchases and swap agreements—making it Hertz’s second-largest shareholder.

This strategic accumulation was enabled by a rare Securities and Exchange Commission (SEC) exemption, which allowed Pershing Square to delay public disclosure of its stake until Wednesday, giving Ackman time to acquire a larger share of the company under the radar.

A Decade of Turmoil: Hertz’s Rocky Road

Founded in 1918, Hertz has seen its fair share of volatility over the past decade. After filing for Chapter 11 bankruptcy protection in 2020 due to the COVID-19 pandemic's devastating impact on travel, the company reemerged from bankruptcy in 2021 with ambitious plans to modernize its fleet.

But those ambitions came with a hefty price. In a bid to lead the electric vehicle transition in car rentals, Hertz committed to purchasing tens of thousands of Teslas. However, plunging resale values for EVs—particularly Teslas—created massive financial losses.

In its 2024 Q4 earnings report, Hertz posted a $2.9 billion net loss for the full year, including a $245 million hit from selling off electric vehicles during the final quarter. The losses significantly dented investor confidence, sending shares downward—until Ackman’s involvement reignited optimism.

Market Reaction: Investor Optimism Rekindled

The market responded swiftly and enthusiastically to Ackman’s vote of confidence:

• Hertz shares surged more than 50% on Wednesday alone, reaching their highest level in over six months.
• Trading volume spiked, with over 120 million shares exchanged—nearly six times the daily average, according to Bloomberg data.
• The company’s market cap jumped by approximately $1.2 billion in a single day.

Wall Street analysts and retail investors alike are viewing the move as a potential signal of strategic turnaround or activist influence.

What Does Ackman See in Hertz?

Bill Ackman is known for bold, long-term bets on undervalued companies with transformation potential. His previous investments in Chipotle, Canadian Pacific Railway, and Howard Hughes Corp. all followed similar patterns—companies in distress with paths to recovery under strong guidance and structural change.

While neither Ackman nor Pershing Square has made a public statement about their vision for Hertz, experts speculate that the fund may push for:

• Fleet restructuring with a reduced reliance on volatile EV assets.
• Operational efficiency improvements using AI, automation, or strategic partnerships.
• Leadership shakeups or changes in capital allocation policies.

Looking Ahead: A Pivotal Moment for Hertz

The involvement of a high-profile investor like Ackman has undoubtedly shifted the narrative for Hertz. While the company still faces challenges—rising interest rates, fluctuating used car prices, and evolving travel trends—Ackman’s backing suggests belief in a turnaround.

With a nearly 20% stake, Pershing Square now holds considerable influence over Hertz’s future direction. Whether it leads to a full strategic overhaul, renewed profitability, or a future buyout remains to be seen—but one thing is certain: the market is watching.

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