(Bloomberg) – Pershing Square Capital Management of Bill Ackman has amassed almost 20% participation in the rental company Hertz Global Holdings Inc. In a bet that prices will increase car prices, said the billionaire in an article on social networks.
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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.
Hertz’s shares jumped 44% in New York trade on Thursday, extending a two -day rally in which the title has more than doubled.
ACKMAN bets that Hertz can pass a bad bet on electric vehicles by Tesla Inc. and capitalize on a potential increase in the prices of used cars resulting from President Donald Trump’s price 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.
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 kicked $ 1.6 billion.
