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Takeaways
- Hertz shares fell Monday after more than doubling their value last week.
- Last week's rally came as billionaire Bill Ackman's Pershing Square revealed a large investment in the company.
- Pershing owned a stake of approximately 4% in Hertz by the end 2024. This position has reportedly increased to nearly 20% over the past few months.
Hertz shares (HTZ) fell Monday, wiping away some of the gains made last week after billionaire Bill Ackman revealed that Pershing Square has invested a lot in the company.
Stocks dropped over 11% recently, possibly due to profit-taking after shares of the struggling car rental firm more than doubled in value last week. Pershing Square announced that it owned 12.7 million Hertz stock at the end of fourth quarter, which is a 4% stake.
CNBC reported that Pershing’s position has grown to nearly 20% in the past few years, making Ackman Hertz’s second largest shareholder. Ackman’s company received an exemption from Securities and Exchange Commission, which allowed it to defer disclosing their stake until last Thursday.
According to the report, Hertz CEO Gil West wrote in a letter addressed to employees that “we should feel encouraged by Bill Ackman’s comments and energized” by his strong support. Hertz did respond to a comment immediately.
Pershing’s increasing investment comes after Hertz announced a loss in 2024 of $2,86 billion. The company was hit by vehicle depreciation, as well as the fallout of its unsuccessful attempts to switch to electric vehicles.