Billionaire investor discloses nearly 20% stake in Hertz, lays out path to greater profitability

Bill Ackman, chief executive officer of Pershing Square Capital Management

Billionaire hedge-fund manager Bill Ackman disclosed a nearly 20% stake in rental-car company Hertz on Thursday as he laid out his bullish reasoning behind the bet.

In a social-media post on X, Ackman said the current tariff environment helps Hertz, which he described as part of an oligopoly where Enterprise, Avis and Hertz control nearly 95% of the U.S. market. 

Driving his rationale: “Improving industry structure and more rational competitive behavior,” and fixing a recent misstep when Hertz acquired a large fleet of electric vehicles, Ackman wrote.

He also mused about a potential partnership with Uber, and said that he would call Dara Khosrowshahi, the ride-hailing giant’s chief executive. 

Hertz did not immediately respond to a request for comment. Khosrowshahi responded on social media, “Hertz has been a great partner of ours @Uber—excited to brainstorm on how we can expand on our relationship!”

“We began accumulating shares in @Hertz late last year, and as of today, we have a 19.8% stake in the company comprised of outright share ownership and total return swaps,” Ackman said in his post.

Auto tariffs are likely to cause used car prices to rise, and Hertz owns a fleet of over 500,000 vehicles valued at approximately $12 billion, Ackman tweeted. A 10% increase in used car prices would equate to a $1.2 billion gain on its auto assets, equivalent to approximately half of the company’s current market capitalization.

Ackman, who leads Pershing Square Capital Management, cited an operational turnaround being led by Hertz’s new management team as giving him confidence in the business, adding that he believes the leveraged capital structure will help generate an attractive return.

Hertz shares closed up 44.31% at $8.24 Thursday. Over the past two days, Hertz is up 125.75%.

Pershing Square’s investment strategy involves holding a concentrated portfolio of well-known stocks that it believes are undervalued. Its largest positions include stakes in Universal Music Group, Chipotle Mexican Grill, Uber Technologies and Restaurant Brands International, the parent company of Burger King. Earlier in his career, Ackman made a name for himself in waging proxy fights and short selling, but Pershing Square has moved away from that in recent years. 

His main fund, Pershing Square Holdings, has generated a compound annual return of about 12.7% since its inception in 2012, slightly underperforming the S&P 500 over that span. It is down 5.5% this year through April 15.