Billionaire investor Bill Ackman is making a bold play on Hertz Global Holdings, taking a nearly 20% stake in the rental car company through his hedge fund, Pershing Square Capital Management. The move signals confidence in Hertz’s ongoing turnaround strategy, and more notably, a belief that President Trump’s new 25% tariff on imported vehicles could significantly increase the value of the company’s existing fleet.
Ackman disclosed the investment via social media, noting that Pershing Square’s 19.8% position is comprised of direct share ownership and total return swaps.
Tariffs Seen as Windfall for Used Car Holdings
Trump’s auto import tariffs are expected to push new car prices up by thousands of dollars, as supply chains adjust and manufacturers absorb higher costs. Ackman is betting this will lead to a surge in demand for used cars, which could directly benefit Hertz’s massive fleet of over 500,000 vehicles—a fleet the company estimates is worth about $12 billion.
In Ackman’s estimation, a 10% rise in used car prices could yield a $1.2 billion gain on Hertz’s vehicle assets—roughly half of the company’s pre-rally market capitalization.
“Hertz is uniquely well-positioned in the current tariff environment,” Ackman wrote, arguing that the company’s asset-heavy balance sheet is an overlooked advantage.
Hertz Stock Doubles Amid Renewed Optimism
The market has responded swiftly. Hertz stock (HTZ) soared 44% Thursday, building on a two-day rally that more than doubled the stock’s value. Shares had previously traded under $5, but optimism around tariffs and Ackman’s backing has triggered a sudden bullish turn.
Still, the road ahead isn’t without hurdles. Hertz CEO Gil West, formerly of Delta Air Lines, has been tasked with managing the company’s significant debt load and reversing its troubled bet on Tesla EVs, which previously strained finances and hurt utilization rates.
Ackman believes Hertz could reach $30 per share by 2029, but that projection depends on achieving a series of financial milestones, including:
- $1,500 in revenue per unit
- Daily per-vehicle operating costs in the low $30s
- Depreciation per vehicle around $300
- Fleet utilization rates near 85% — a challenging target given historical averages closer to 80%
Risk vs. Reward
Ackman’s confidence mirrors that of Carl Icahn, who famously took a large position in Hertz before it filed for bankruptcy in 2020 — a move that cost Icahn $1.6 billion. While Ackman’s strategy accounts for lessons from that chapter, the investment is not without significant risk.
For Hertz, success now hinges on capitalizing on favorable macro conditions, executing on operations, and navigating any further trade policy shocks.
