Hertz (HTZ) shares tumbled 11% Monday morning, giving back gains from last week’s rally sparked by Bill Ackman’s hedge fund taking a significant position in the rental car giant.
Ackman, the CEO of Pershing Square Capital Management, shared on social media that his company had built a 19.8% stake in Hertz after accumulating shares since late last year.
Hertz stock surged on Wednesday after Pershing Square disclosed its 12.7 million share stake, fueling investor speculation about the high-profile fund’s view of the struggling company.
The rental company reported a loss of nearly $2.9 billion in 2024. Hertz attributed the disappointing results to vehicle depreciation and the drop in the price of electric vehicles, which it began purchasing back in 2021 to stay competitive with the industry.
Ackman sees the company benefiting from auto tariffs, which will likely raise used car prices in the near term. Other automakers, like Audi and Volkswagen (VWAGY), have pledged to halt imports to avoid paying the 25% levies.
According to Ackman, that would be a boon for Hertz, which owns a fleet of more than 500,000 cars valued at roughly $12 billion. A 10% increase in used car prices could translate to a $1.2 billion boost in the company’s auto assets alone.