Share prices of Hertz surged 56% after billionaire investor Bill Ackman’s firm disclosed a stake in the car rental company.
Pershing Square Capital Management said in a regulatory filing on Wednesday that it had acquired 12.7 million shares valued at $46.5 million. Pershing Square owns 4.1% of Hertz, making it the third-largest investor after Knighthead Capital Management and BlackRock, according to LSEG data.
CNBC reported on Wednesday that Pershing Square’s purchase — which includes shares and swaps — took its Hertz holdings to about 19.8%
Hertz shares closed 56.4% higher at $5.71 apiece on Wednesday and were up 33.8% in after-hours trade. The stock was little changed this year before Pershing Square’s disclosure.
Even though Hertz’s gains on Wednesday were massive, the car rental company’s stock isn’t a stranger to such eye-watering jumps.
In summer 2020, Hertz’s shares surged over 800% in weeks after filing for pandemic-induced Chapter 11 bankruptcy protection — making it the original meme stock.
It exited Chapter 11 bankruptcy in 2021 and started investing heavily in electric vehicles, including a plan to buy 100,000 Teslas.
However, the company started backtracking on its EV plan due to the cost of maintenance and repairs for the cars. Used EV prices have also been falling sharply.
Hertz was selling a significant number of its EVs by 2024 and was even asking customers if they wanted to buy the vehicles.
The failed bet on EVs showed up in earnings. Vehicle depreciation cost Hertz a $1 billion non-cash impairment charge in the third quarter.
Pershing Square did not immediately respond to Business Insider’s request for comment sent outside regular business hours.
