Pershing Square Capital Management of Bill Ackman amassed almost 20% in Hertz Global Holdings Inc. in a bet on the recovery plan of the car rental company and that the prices will increase the value of its vehicles.
The company began to buy actions at the end of last year and now has “a 19.8% participation in the company made up of an outright property and total return,” said Ackman in an article on X.
Ackman bets that hetz can exceed a bad bet On the electric vehicles of Tesla Inc. and capitalizes on a potential increase in the prices of used cars resulting from the price of President Donald Trump on American automobile imports. It is also based on the general manager of Hertz, Gil West, managing the major debt load of the company and carrying out a continuous recovery effort.
Hertz’s shares jumped 44% in New York trade on Thursday, extending a two -day rally in which the title has more than doubled.
West told Hertz employees in his regular note on Friday this week that he was humiliated and encouraged by Ackman’s support.
“This approval testifies to our progress, and above all, the relentless effort that each of you contributes every day,” West wrote in an email, according to a person close to the company. “We should be proud of the progress we have made, but also recognize that there is still an important job to come.”
The 25% levy of Trump from imported cars should largely increase the prices of thousands of dollars cars if it remains in force for a long time. This could in turn increase the value of used cars – especially late model vehicles that are rare – as consumers who are at the price of new cars at previously possessed vehicles.
“Hertz is only well positioned in the current price environment,” said Ackman in the Post X. “Hertz has a fleet of more than 500,000 vehicles worth $ 12 billion. A 10% increase in second -hand cars would be equivalent to a gain of $ 1.2 billion on its automotive assets – equivalent to around half of the company’s current market capitalization. ”
Ackman sees an itinerary for Hertz to reach $ 30 per share by 2029. Before this week’s rally, Hertz’s shares have negotiated for less than $ 5. Getting there depends on achieving West’s objectives to reach $ 1,500 in unit, daily operating expenses per vehicle in $ 30 bass and damping per unit of around $ 300.
Pershing mathematics is also based on Hertz, passing its use of the fleet to 85%, a level that the company has rarely equaled and which has always been closer to 80%.
Ackman is not the first Titan of Wall Street to consider investing in Hertz. Billionaire Investor Carl Icahn also thought that he could take advantage of the car rental company. Instead, Hertz went bankrupt and Icahn took a$ 1.6 billionbeat.
In the short term, Ackman said: “We have low expectations for the results of the first quarter of Hertz and first half.”
The same goes for analysts covering the business. Six evaluate the actions the equivalent of a conservation and four recommend selling the action, according to data compiled by Bloomberg.
He also offered a little futurism for investors and his supporters on X. Ackman launched the idea of Hertz – with his 11,200 world locations – managing a fleet of autonomous vehicles for Uber Technologies Inc. He joked that he would contact the CEO of Uber Dara Khosrowshahi.
Khosrowshahi responded in ajobon X that Hertz was a “big partner” of his business, referring to acollaborationSince 2021, offering advantages to carpooling cod drivers who rent electric vehicles via Hertz. Khosrowshahi added that he was “excited to think about how we can develop our relationship”.
Ackman concluded his position with a warning.
“The investment is risky,” he wrote. “There is no guarantee of success.
This story was initially presented on Fortune.com
