Hertz (HTZ) Stock News & Analysis: Ackman’s Big Bet Sends Shares Flying 44%

TLDR

Bill Ackman’s Pershing Square acquired a 19.8% stake in Hertz through share purchases and total return swaps Hertz stock surged 44.31% on Thursday, hitting a new all-time high of $8.74 before closing at $8.24 Ackman believes tariffs will boost used car prices, potentially adding $1.2 billion to Hertz’s fleet value Hertz is transitioning away from high-cost vehicles to reduce depreciation expenses Ackman teased a potential partnership with Uber, whose CEO expressed interest in expanding their relationship

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Bill Ackman has made a major move into the car rental market. The billionaire hedge fund manager disclosed on Thursday that his firm, Pershing Square Capital Management, now holds a 19.8% stake in Hertz Global Holdings (HTZ). This announcement sent Hertz shares skyrocketing by 44.31% to close at $8.24.

Ackman revealed that his firm began building its position in Hertz late last year. The stake consists of direct share ownership combined with total return swaps.

The news came just one day after Pershing Square disclosed a $46.5 million stake in Hertz, which had already pushed the stock up 28.6%. With Thursday’s gains, Hertz stock has now climbed an impressive 118% since the beginning of 2025.

The stock touched an all-time high of $8.74 during intraday trading before settling slightly lower at the close. Over just two days, Hertz shares have surged by 125.75%.

Hertz Global Holdings, Inc. (HTZ)

Strategic Changes Underway

Ackman expressed confidence in Hertz’s new management team and their operational turnaround strategy. He pointed to several specific changes the company is making to improve profit margins.

Hertz is rotating its fleet composition. The company is moving away from high-cost vehicles, including electric vehicles that had proven problematic.

The car rental giant is working to boost unit revenues. This effort, combined with ongoing cost-cutting measures, is expected to enhance profitability.

Hertz owns a fleet of over 500,000 vehicles valued at approximately $12 billion. Ackman believes this positions the company well in the current market environment.

Tariff Benefits and Industry Structure

One key factor in Ackman’s investment thesis is the current tariff environment under President Trump. He argues that auto tariffs are likely to cause used car prices to rise.

This could prove very beneficial for Hertz’s bottom line. Ackman calculates that a 10% increase in used car prices would create a $1.2 billion gain on Hertz’s auto assets.

That potential gain represents about half of the company’s current market capitalization. Hertz’s leveraged capital structure could amplify returns from such appreciation.

Ackman also highlighted the advantageous industry structure. He described the U.S. car rental market as an “oligopoly” where three companies—Enterprise, Avis, and Hertz—control nearly 95% of the market.

This concentrated market structure could lead to “more rational competitive behavior,” according to Ackman.

Uber Partnership Possibility

Perhaps the most intriguing aspect of Ackman’s announcement was his mention of a potential partnership with Uber (UBER). He indicated he would reach out to Uber CEO Dara Khosrowshahi to discuss opportunities.

Khosrowshahi quickly responded on social media. “Hertz has been a great partner of ours @Uber—excited to brainstorm on how we can expand on our relationship!” he wrote.

Any partnership between the two companies could create new growth avenues for Hertz. Ackman already holds a stake in Uber as part of Pershing Square’s concentrated portfolio strategy.

Pershing Square focuses on well-known stocks it believes are undervalued. Its largest positions include Universal Music Group, Chipotle Mexican Grill, Uber Technologies, and Restaurant Brands International.

The fund has generated a compound annual return of about 12.7% since its inception in 2012. This performance has slightly underperformed the S&P 500 over that span.

For investors who bought $1,000 worth of Hertz shares at its IPO in June 2021, the investment would now be worth $300.85, reflecting the company’s struggles in recent years.

Hertz did not immediately respond to requests for comment on Ackman’s investment or the potential Uber partnership.

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