Hertz Soars as Bill Ackman's Pershing Square Takes 20% Stake: What It Means for Investors

Hertz (NASDAQ: HTZ) stock is back in the spotlight, surging 56% on Wednesday and another 44% on Thursday, after billionaire investor Bill Ackman's Pershing Square revealed a significant and growing stake in the car rental company.

Initially disclosed as a 4% position in an amended 13F filing, reports now peg Pershing's total exposure at 20% (including swaps)—a bold bet that has reignited investor interest in a company still recovering from its troubled Tesla bet and pandemic-induced volatility.

🔍 Why Is Ackman Bullish on Hertz?

Ackman sees $30/share value potential by 2029. Here's a breakdown of his thesis, shared publicly via X:

1. Improved Industry Dynamics

• The U.S. car rental market is an oligopoly: Hertz, Avis, and Enterprise control 95% of it.

• Post-COVID pricing discipline remains strong, aiding profitability.

2. Tesla Headache Nearing Resolution

• Hertz's earlier issues stemmed from buying a large EV fleet from Tesla (NASDAQ: TSLA).

• Tesla's price cuts tanked the resale value of those vehicles.

• Hertz is now shifting focus back to a more balanced and manageable fleet.

3. New Leadership, New Gameplan

• A turnaround strategy led by fresh management is already showing traction.

• Operational efficiency and fleet optimization are key pillars.

4. Leverage = Upside

• With a leveraged capital structure, any revenue and margin gains could significantly magnify returns for equity holders.

A Potential Uber Partnership?

Ackman also hinted at the possibility of a strategic tie-up with Uber (NYSE: UBER), where Pershing also holds a large position. This could create:

• Fleet synergies: Hertz cars for Uber drivers.

• Shared mobility ecosystems: Think flexible rentals for gig workers.

• Cost advantages: Shared purchasing, financing, or insurance deals.

Such a partnership could enhance earnings visibility for both companies, especially as urban mobility continues evolving.

Analyzing the Numbers

To stay ahead of this trade and assess the fundamental backing of Ackman's bold bet, consider these data sources:

• Price Target Summary API
  Get analyst forecasts and see if the market aligns with Ackman's $30 target.
  📈 Price Target Summary

• Ratios (TTM) API
  Dive into Hertz's current valuation, debt levels, and return ratios to see how leverage might amplify results.
  📊 Ratios (TTM)

Final Take

Ackman's involvement adds credibility, but it also raises expectations. If Hertz can navigate past its EV missteps, leverage its dominant market position, and possibly align with Uber, this could mark the beginning of a major turnaround.

But with high leverage comes high risk. As always, do your homework—and keep an eye on whether this story evolves from speculation to execution.