Ackman Bets Big on Hertz as Tariff Tailwinds Boost Fleet Value: ‘Investing Is Risky, There Are No Guarantees of a Successful Outcome' - Tesla (NASDAQ:TSLA), Hertz Global Holdings (NASDAQ:HTZ)

Bill Ackman‘s hedge fund Pershing Square Capital Management has acquired a significant stake in Hertz Global Holdings Inc. HTZ.

What Happened: The stake, which includes both share ownership and total return swaps, has been built up since the end of last year.

Ackman is of the opinion that Hertz can bounce back from an ill-advised investment in Tesla Inc. TSLA electric vehicles and leverage a potential surge in used-car prices triggered by President Donald Trump‘s tariff on US auto imports.

In a post on X, Ackman said that the company has "a 19.8% stake in the company comprised of outright share ownership and total return swaps."

"Hertz is uniquely well-positioned in the current tariff environment. Hertz owns a fleet of over 500,000 vehicles valued at approximately $12 billion. A 10% increase in used car prices would equate to a $1.2 billion gain on its auto assets – equivalent to approximately half of the company's current market capitalization," Ackman added in the post.

Also Read: Bill Ackman Predicts Strong Future for Berkshire Hathaway After Warren Buffett Steps Down

Following the news, Hertz’s shares soared 44% in New York trading on Thursday, doubling in value over a two-day rally.

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The company’s CEO, Gil West, who is responsible for managing the company’s significant debt and implementing the turnaround, expressed gratitude for Ackman’s support in a note to employees.

Ackman also suggested a future where Hertz, leveraging its global presence, could manage a fleet of autonomous vehicles for Uber Technologies Inc. UBER. Uber CEO Dara Khosrowshahi responded positively to the idea, expressing interest in expanding their existing partnership.

“Investing is risky. There are no guarantees of a successful outcome. Caveat emptor,” he concluded in his post.

Why It Matters: Ackman’s investment in Hertz is a strong vote of confidence in the company’s turnaround strategy. The hedge fund manager’s belief that Hertz can recover from its investment in Tesla and benefit from a potential rise in used-car prices due to tariffs on US auto imports could signal a positive future for the company.

Moreover, the idea of Hertz managing a fleet of autonomous vehicles for Uber could open up new avenues for the company, further strengthening its position in the market. However, Ackman has warned investors about the inherent risks, stating, “Investing is risky. There are no guarantees of a successful outcome. Caveat emptor.”