According to investor Bill Ackman, President Trump's automatic tariffs may have raised concerns about rising consumer prices, but some businesses that buy cars may actually benefit. The founder of Pershing Square Management yesterday (April 17) revealed a nearly 20% stake in the car rental company, filed a bullish case for Hertz.
“Hertz is in a good position in the current tariff environment,” Ackerman wrote in an article on X. “With 25% of imported cars levy the price of a used car, which is the value of the Hertz fleet, which is the value of Hertz's fleet (Hertz's 500,000 cars worth about $12 billion), he said in tandem. A 10% increase in used cars' value will increase the company's fleet value by $1.2 billion, accounting for half of Hertz's current market value.
Hertz's share price surged more than 44% after revealing a 19.8% stake in Ackman.
Appears from the Tesla experiment of bankruptcy and bad luck
Hertz has had a lot of trouble over the past few years. After the bankruptcy was declared in 1920 during the 1920 pandemic, the company struggled to spin toward electric vehicles – an expensive bet for Tesla that would go bankrupt due to soft demand. In February, Hertz reported a loss of $2.9 billion in 2024 and said it had sold 30,000 electric vehicles from the fleet.
Ackman, who started building his position in the company last year, bets on a successful turnaround that could exceed three times to $30 a share by 2029.
The task falls in the hands of Hertz's new CEO Gil West, who took on the role in early 2024. West focuses on “spin Hertz fleets, increasing unit revenue and reducing operating costs” to “significantly increase profit margins in the coming years,” Ackman said.
According to Bloomberg, in a case given to employees today (April 18), West praised Ackerman's support and described it as “proving our progress.”
Ackerman also emphasized Hertz's dominant position in the “oligarchy”. He noted that Hertz and its two rival companies and Aves currently control about 95% of the car rental market. Ackman praised the business as the best operation in the trio, noting that its estimated profit margin is 20%, evidence that the car rental business can be very profitable.
Is the Hertz-uber partnership a card?
Ackman [Uber] Work with Hertz [autonomous vehicle] Will the fleet be rolling out over time? “He suggested, suggesting a potential conversation with Uber CEO Dara Khosrowshahi.
With its extensive fleet, global footprint and vehicle maintenance expertise, Hertz will “make it an ideal partner for Uber,” Ackman said.
Uber seems to be open to the idea. Khosrowshahi replied on X: “Hertz has always been our great partner. For how we can expand our relationship!”
