Shares of Hertz () rocketed 56% higher on Wednesday after billionaire hedge fund operator Bill Ackman revealed a significant 4.1% stake in the troubled car rental agency. Ackman, who runs Pershing Square Capital Management, said in an SEC filing he had acquired a 12.7 million share stake in Hertz worth $46.5 million.
The news sent HTZ stock soaring as the market action suggested the hedge fund operator’s purchase validated the belief that rental car companies and ride-share platforms could be winning bets in the trade as the cost of buying a car gets more expensive.
Yet the run-up in HTZ stock wasn’t finished at the closing bell yesterday. Shares continued their meteoric rise afterhours with HTZ jumping another 26% to $7.20 per share. If those gains hold, Hertz stock will have completely erased its deficit of the past year with a 9.5% gain.
The rental car company has struggled amid a changing automotive landscape as ride-sharing companies, electric vehicles, and technological disruptions. Hertz suffered a $2.9 billion, or $9.34 per share, loss last year as the effects of a failed fleet electrification program gets unwound and depreciation on its asset-heavy business model weighed on the company. Hertz reports first quarter 2025 earnings on May 12 after the markets close.
Ackman is an activist investor, taking big stakes in companies and then actively campaigning to change their operations or strategies to increase shareholder value. He hasn’t publicly stated his intentions yet with Hertz, but with a troubled company that he likely sees possessing assets that can be unlocked, he may take a proactive role in improving HTZ’s performance.
In contrast, earlier this year Ackman invested over $2 billion in Uber Technologies (UBER), another potential big winner from the trade war, a company he characterized as being “one of the best managed and highest quality businesses in the world.” It is now his $10 billion portfolio’s largest holding.
