**Bill Ackman’s Pershing Square Acquires Significant Stake in Hertz**
**Meta Description:** Bill Ackman’s Pershing Square Capital Management has acquired a 19.8% stake in Hertz, betting on the company’s turnaround and potential used-car price increases.
**URL Slug:** pershing-square-hertz-stake
**H1:** Bill Ackman’s Pershing Square Takes 19.8% Stake in Hertz Global Holdings
Bill Ackman’s Pershing Square Capital Management has recently acquired a substantial 19.8% stake in Hertz Global Holdings Inc., signaling confidence in the rental car company’s turnaround strategy and the anticipated impact of tariffs on vehicle values. The investment began late last year and includes both direct share ownership and total return swaps, as Ackman shared in a post on social media platform X.
Ackman is optimistic that Hertz can recover from its previous missteps with Tesla Inc.’s electric vehicles and benefit from a potential increase in used-car prices due to tariffs imposed on U.S. auto imports during the Trump administration. The success of this strategy hinges on Hertz’s CEO, Gil West, effectively managing the company’s significant debt and executing a successful turnaround plan.
In a recent trading session, Hertz shares surged by 44% in New York, continuing a two-day rally that saw the stock more than double in value. In a note to employees, West expressed gratitude for Ackman’s support, stating that it reflects the progress made and the ongoing efforts of the team. He emphasized the importance of recognizing both achievements and the work that lies ahead.
The 25% tariff on imported automobiles is expected to increase car prices significantly, potentially driving up the value of used cars, particularly late-model vehicles that are in limited supply. This shift could lead consumers priced out of the new-car market to turn to pre-owned options. Ackman noted that Hertz is well-positioned to capitalize on this tariff environment, with a fleet of over 500,000 vehicles valued at approximately $12 billion. A mere 10% increase in used car prices could result in a $1.2 billion gain on Hertz’s auto assets, nearly half of the company’s current market capitalization.
Ackman envisions a path for Hertz to reach $30 per share by 2029, a significant increase from its pre-rally trading price of under $5. Achieving this target will depend on meeting specific operational goals, including generating $1,500 in revenue per unit, maintaining daily per-vehicle operating expenses in the low $30 range, and keeping depreciation per unit around $300. Additionally, Hertz must improve its fleet utilization to 85%, a level the company has rarely achieved historically.
While Ackman is optimistic about Hertz’s long-term prospects, he acknowledges low expectations for the company’s first-quarter and first-half results, a sentiment echoed by analysts covering the stock.
**FAQ:**
**What is the significance of Ackman’s investment in Hertz?**
Ackman’s investment represents a strong belief in Hertz’s potential for recovery and growth, particularly in light of favorable market conditions created by tariffs that could increase used-car values.