{"id":14822,"date":"2025-04-19T10:05:47","date_gmt":"2025-04-19T10:05:47","guid":{"rendered":"https:\/\/topat10.com\/?p=14822"},"modified":"2025-04-19T10:05:47","modified_gmt":"2025-04-19T10:05:47","slug":"bill-ackman-makes-big-bet-on-hertz-becoming-tariff-winner","status":"publish","type":"post","link":"https:\/\/topat10.com\/?p=14822","title":{"rendered":"Bill Ackman makes big bet on Hertz becoming tariff winner"},"content":{"rendered":"\n<p>Bill Ackman\u2019s Pershing Square Capital Management has amassed a nearly 20% stake in <a href=\"https:\/\/fortune.com\/company\/hertz-global-holdings\/\" target=\"_blank\">Hertz Global Holdings<\/a> Inc. in a bet on the rental car company\u2019s turnaround plan and that tariffs will boost the value of its vehicles.<\/p>\n<p>The firm began buying shares late last year and now has \u201ca 19.8% stake in the company comprised of outright share ownership and total return swaps,\u201d Ackman said in a post on <a href=\"https:\/\/fortune.com\/company\/twitter\/\" target=\"_blank\">X<\/a>.<\/p>\n<p>Ackman is wagering that Hertz can get past a\u00a0<a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2025-02-13\/hertz-tumbles-with-worse-than-expected-loss-on-ev-sale-plan\" target=\"_blank\" rel=\"noreferrer noopener\">bad bet<\/a>\u00a0on <a href=\"https:\/\/fortune.com\/company\/tesla\/\" target=\"_blank\">Tesla<\/a> Inc. electric vehicles and capitalize on a potential rise in used-car prices stemming from President Donald Trump\u2019s tariff on US auto imports. It also relies on Hertz Chief Executive Office Gil West managing the company\u2019s large debt load and pulling off an ongoing turnaround effort.<\/p>\n<p>Hertz shares jumped 44% in New York trading on Thursday, extending a two-day rally in which the stock more than doubled in value.<\/p>\n<p>West told Hertz employees in his regular Friday note this week that he\u2019s humbled and encouraged by Ackman\u2019s support.<\/p>\n<p>\u201cThis endorsement is a testament to our progress, and importantly, the relentless effort each of you contributes every day,\u201d West wrote in an email, according to a person close to the company. \u201cWe should be proud of the progress we\u2019ve made but also recognize there is still significant work ahead.\u201d<\/p>\n<p>Trump\u2019s 25% levy on imported automobiles is widely expected to raise car prices by thousands of dollars if it remains in effect for long. That could in turn drive up the value of used cars \u2014 especially late-model vehicles that are in short supply \u2014 as consumers who find themselves priced out the new-car market turn to previously owned vehicles.<\/p>\n<p>\u201cHertz is uniquely well-positioned in the current tariff environment,\u201d Ackman said in the X post. \u201cHertz owns a fleet of over 500,000 vehicles valued at approximately $12 billion. A 10% increase in used car prices would equate to a $1.2 billion gain on its auto assets \u2013 equivalent to approximately half of the company\u2019s current market capitalization.\u201d<\/p>\n<p>Ackman sees a route for Hertz to get to $30 a share by 2029. Before this week\u2019s rally, Hertz shares traded for less than $5. Getting there hinges on achieving West\u2019s targets to reach $1,500 in revenue per unit, daily per-vehicle operating expenses in the low $30-range and depreciation per unit of about $300.<\/p>\n<\/p>\n<p>Pershing\u2019s math also rests on Hertz getting its fleet utilization to 85%, a level the company has rarely matched and which has historically been closer to 80%.<\/p>\n<p>Ackman isn\u2019t the first Wall Street titan to envision upside from investing in Hertz. Billionaire investor Carl Icahn also thought he could cash in on the rental car company. Instead, Hertz went bankrupt and Icahn took a&nbsp;<a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2020-05-27\/icahn-files-13d-a-on-hertz\" target=\"_blank\" rel=\"noreferrer noopener\">$1.6 billion<\/a>&nbsp;beating.<\/p>\n<p>In the near term, Ackman said, \u201cwe have low expectations for Hertz\u2019s Q1 and first half results.\u201d<\/p>\n<p>So do analysts covering the company. Six rate the shares the equivalent of a hold and four recommend selling the stock, according to data compiled by Bloomberg.<\/p>\n<p>He also offered a bit of futurism for investors and his followers on X. Ackman floated the idea of Hertz \u2014 with its 11,200 global locations \u2014 managing a fleet of self-driving vehicles for <a href=\"https:\/\/fortune.com\/company\/uber-technologies\/\" target=\"_blank\">Uber Technologies<\/a> Inc. He quipped that he would contact Uber CEO Dara Khosrowshahi.<\/p>\n<p>Khosrowshahi responded in a&nbsp;<a href=\"https:\/\/x.com\/dkhos\/status\/1912990248633585801\" target=\"_blank\" rel=\"noreferrer noopener\">post<\/a>&nbsp;on X that Hertz has been a \u201cgreat partner\u201d of his company, referring to a&nbsp;<a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2021-10-27\/uber-drivers-get-50-000-teslas-in-another-blockbuster-hertz-deal?sref=LqVYNnVJ\" target=\"_blank\" rel=\"noreferrer noopener\">collaboration<\/a>&nbsp;since 2021 to offer perks to rideshare drivers who rent electric vehicles through Hertz. Khosrowshahi added he is \u201cexcited to brainstorm on how we can expand on our relationship.\u201d<\/p>\n<p>Ackman concluded his post with a warning.<\/p>\n<p>\u201cInvesting is risky,\u201d he wrote. \u201cThere are no guarantees of a successful outcome. Caveat emptor.\u201d<\/p>\n<p>This story was originally featured on <a href=\"https:\/\/fortune.com\/article\/ackman-hertz-pershing-trump-tariff-winner-rental-cars-autos\/\" target=\"_blank\">Fortune.com<\/a><\/p>\n\n","protected":false},"excerpt":{"rendered":"<p>Bill Ackman\u2019s Pershing Square Capital Management has amassed a nearly 20% stake in Hertz Global Holdings Inc. in a bet on the rental car company\u2019s turnaround plan and that tariffs will boost the value of its vehicles. The firm began buying shares late last year and now has \u201ca 19.8% stake in the company comprised [&hellip;]<\/p>\n","protected":false},"author":758,"featured_media":14823,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_uag_custom_page_level_css":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[123],"tags":[],"class_list":["post-14822","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Bill Ackman makes big bet on Hertz becoming tariff winner | Unlock Informed Choices with Us<\/title>\n<meta name=\"description\" content=\"Bill Ackman\u2019s Pershing Square Capital Management has amassed a nearly 20% stake in Hertz.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, 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The firm began buying shares late last year and now has \u201ca 19.8% stake in the company comprised&hellip;","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/topat10.com\/index.php?rest_route=\/wp\/v2\/posts\/14822","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/topat10.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/topat10.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/topat10.com\/index.php?rest_route=\/wp\/v2\/users\/758"}],"replies":[{"embeddable":true,"href":"https:\/\/topat10.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=14822"}],"version-history":[{"count":0,"href":"https:\/\/topat10.com\/index.php?rest_route=\/wp\/v2\/posts\/14822\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/topat10.com\/index.php?rest_route=\/wp\/v2\/media\/14823"}],"wp:attachment":[{"href":"https:\/\/topat10.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=14822"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/topat10.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=14822"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/topat10.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=14822"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}