New York, NY – Billionaire investor Bill Ackman recently revealed on social media that his firm, Pershing Square Capital Management, has acquired a significant 19.8% stake in Hertz Global Holdings Inc. The move comes as Ackman bets on the potential impact of tariffs on car prices. The firm began purchasing shares of Hertz late last year, resulting in a sharp increase in the company’s stock value. Ackman’s strategy involves anticipating a rise in used-car prices due to President Donald Trump’s tariff on US auto imports.
With Hertz CEO Gil West at the helm, Ackman sees potential for the company to overcome previous setbacks, such as a failed bet on Tesla Inc. electric vehicles. The 25% tariff on imported automobiles is expected to drive up car prices, ultimately increasing the value of used cars. Ackman believes that Hertz, with its fleet of over 500,000 vehicles, is well-positioned to benefit from this tariff environment. He envisions a potential $1.2 billion gain on Hertz’s auto assets with a 10% increase in used car prices.
Looking ahead, Ackman sees a path for Hertz to reach $30 a share by 2029, but acknowledges the challenges the company faces in meeting revenue targets and improving fleet utilization. Despite the risks involved in investing, Ackman remains optimistic about the future possibilities for Hertz, including the potential for managing a fleet of self-driving vehicles for companies like Uber.
While Ackman’s investment in Hertz carries potential rewards, it also comes with significant risks. Other Wall Street investors, like Carl Icahn, have previously experienced losses after betting on the rental car company. However, Ackman remains confident in his strategy and emphasizes the unpredictable nature of investing.
As Hertz navigates the uncertainties of the market, Ackman’s bold investment underscores the complexities and possibilities within the ever-changing world of finance.