Bill Ackman’s Management Square Capital Management has accumulated nearly 20% of the shares in Hertz Global Holdings Inc. In a bet on the turn plan of the rental car company and that tariffs will increase the value of its vehicles.
The firm began buying shares at the end of last year and now has “a 19.8% of the shares in a company composed of ownership of fair shares and total return exchanges,” Ackman said in a post on X.
Ackman is concrete that hertz can pass a bad bet In Tesla Inc. Electric vehicles and capitalize a possible increase in the prices of used cars derived from President Donald Trump’s tariff for US vehicle imports. It also relies on the main executive office of Hertz Gil West that manages the company’s high debt load and attracts a continuous turning effort.
Hertz’s shares jumped 44% in New York Trading on Thursday, extending a two-day rally in which shares more than doubled in value.
West told Hertz employees in his regular Friday note this week that he is humble and encouraged by Ackman’s support.
“This approval is a testimony of our progress, and most importantly, the ruthless effort each of you contributes daily,” West wrote in an email, according to a person near the company. “We have to be proud of the progress we have made, but also admit that there are still important jobs ahead.”
Trump’s 25% tax on imported automobiles is expected to raise car prices by thousands of dollars if it remains in force for a long time. This in turn can drive the value of cars used-especially late model vehicles that are in short supply-as consumers find themselves at the market price of new cars turn into previously owned vehicles.
“Hertz is uniquely positioned in the current tariff environment,” Ackman said in the X Post. “Hertz owns a fleet of over 500,000 vehicles worth approximately $ 12 billion. A 10% increase in car prices used would be equated with a profit of $ 1.2 billion in its automatic assets – equivalent to approximately half of the company’s current market capitalization.”
Ackman sees a road that Hertz reaches $ 30 action by 2029. Before this week’s rally, Hertz’s shares traded for less than $ 5. Taking there depends on the achievement of Western goals to reach $ 1,500 in unit income per unit, the daily costs of operating for the low-level $ 30 and depreciation per unit of about $ 300.
Persing mathematics also relies on Hertz taking the use of its fleet at 85%, a level that the company has rarely matched and which has historically been closer to 80%.
Ackman is not the first of the Wall Street Titan that foresees upside down by investing in Hertz. Billionaire Carl Icahn’s investor also thought he could get money at the rental car company. Instead, Hertz went bankrupt and Icahn got one$ 1.6 billionbeating.
In the near deadline, Ackman said, “We have low expectations for Hertz’s results and the first half.”
So make the analysts covering the company. Six estimate the equivalent shares of a holding and four recommend selling shares, according to data compiled by Bloomberg.
He also offered little futurism to investors and his followers on X. Ackman sailed Hertz’s idea 11,200 its global countries-managing a self-driving fleet for Uber Technologies Inc. He called that he would contact CEO Uber Dara KhosroWHAHI.
KhosroWHAHI replied to apostto X which Hertz has been a “excellent partner” of his company, referring to acollaborationSince 2021 to provide the ability to redesign drivers renting electric vehicles through Hertz. Khosrowshahi added that he is “excited to make mental storms how we can expand in our relationships”.
Ackman completed his post with a warning.
“The investment is dangerous,” he wrote. “There is no guarantee of a successful outcome. The remark gap.”
This story was originally presented to Fortune.com