Billionare Investor Bill Ackman Posts Hertz Investment Thesis, Proposes AV Fleet Partnership With Uber

Billionaire hedge fund manager Bill Ackman posted his investment thesis for Hertz Global Holdings, Inc. HTZ on Thursday, one day after disclosing his fund, Pershing Square, had built a sizable stake in the car rental company.

The Details: Ackman confirmed a previous CNBC report that Pershing Square now holds a 19.8% stake in Hertz, making the fund the company's second-largest shareholder.

In a post on X, the hedge fund manager pointed to several factors he believes make Hertz an attractive investment:

"We believe that a combination of: (1) an improving industry structure and more rational competitive behavior, (2) the near resolution of the company's over exposure to Teslas, (3) a successful operational turnaround plan under a new management team with a track record of success in an adjacent industry, and (4) the company's leveraged capital structure will enable Hertz shareholders to generate a highly attractive return on investment," Ackman wrote.

He highlighted Enterprise as an industry leader and said his firm estimates that Enterprise has profit margins of 20% or higher, demonstrating the potential for large profits in the car rental industry.

Ackman closed the post with a proposed scenario in which Hertz could potentially partner with Uber Technologies, Inc. UBER on an autonomous vehicle fleet.

"Hertz's large installed fleet of 500k vehicles, its expertise in vehicle maintenance and servicing, and the significant scope and scale of its thousands of locations (11,200 globally) and other difficult to replace at scale physical infrastructure make it an ideal partner for @Uber, a partnership which could greatly improve the utilization and profitability of Hertz's vehicle fleet," Ackman wrote.

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