Fig. 1. Bill Ackman Auto Tariff Infographic, 2025, Jeremy Swenson.

Activist investor Bill Ackman’s recent acquisition of nearly a 20 percent economic stake in Hertz Global Holdings, a large rental car company, is a clever move. It is based on a complex tariff argument that has the potential to significantly increase returns and the residual values of Hertz’s roughly 500,000-car fleet. In addition to propelling Hertz’s stock to record one-day gains, Ackman has demonstrated how trade restrictions may act as powerful tailwinds for cyclical companies by fusing profound policy knowledge with distressed asset investment.

Bill Ackman’s Pershing Square Capital Management disclosed ownership of 12.7 million shares of Hertz—costing about $46.5 million—which equates to a 4.1 percent direct equity stake in the company.(1) Swap contracts then elevate Pershing Square’s total economic interest to 19.8 percent of Hertz’s outstanding stock, making Ackman the second‑largest stakeholder behind Knighthead Capital and BlackRock.(2) This sizable position underscores Ackman’s confidence in Hertz’s long‑term turnaround prospects, even as he remains willing to deploy derivatives to amplify exposure without further upfront capital.(3)

The market’s response was swift and dramatic: Hertz shares surged 56.4 percent in regular trading—closing at $5.71—immediately after the SEC filing disclosure, then leapt 33.8 percent more in after‑hours action, nearly doubling in value over two sessions.(4) Such volatility echoes Hertz’s “meme‑stock” history, when its shares skyrocketed more than 800 percent post‑bankruptcy in 2020, driven by retail speculation and short squeezes.(5)

Beyond conventional value metrics, Ackman highlighted that U.S. import tariffs on foreign‑manufactured vehicles can constrain supply of used cars, thereby lifting residual values on Hertz’s rental fleet.(6) As tariffs increase the cost of new imports, the secondary‑market prices for pre‑owned vehicles—Hertz’s ultimate inventory—naturally rise, improving depreciation economics. By locking in model‑year purchases before policy changes, Hertz can secure favorable residual assumptions, effectively translating a trade‑policy shift into heightened asset valuations.(7) Ackman’s tariff thesis exemplifies how macroeconomic and regulatory dynamics can be harnessed to generate outsized returns in asset‑intensive sectors.(8)

Hertz’s dramatic rebound belies underlying challenges. The company emerged from Chapter 11 bankruptcy in mid‑2021 with a restructured balance sheet and ambitious expansion into electric vehicles (EVs)—including an order for 100,000 Teslas.(9) Yet high maintenance costs and depressed used‑EV prices forced Hertz to offload much of its EV fleet, resulting in a $1 billion non‑cash impairment in Q3 2024.(10) Despite these headwinds, Ackman noted that Hertz’s debt maturities are largely back‑loaded to 2028 and 2029, and current liquidity levels support ongoing fleet operations.(11) Going forward, Pershing Square’s substantial stake positions Ackman to advocate for management changes or strategic initiatives—ranging from fare restructuring to fleet optimization—to sustain momentum.(12)

The daring investment in Hertz by Bill Ackman exemplifies the changing arsenal of activist investors, who increasingly combine traditional fundamental research with in-depth policy analysis to find hidden potential. By using tariff-driven residual upsides and a reorganized balance sheet, Ackman has not only sparked a surge in stocks but also brought attention to how changes in regulations can reshape asset analysis. The success of Ackman’s thesis will depend on execution and the larger trade environment as Hertz negotiates EV decisions, debt maturities, and governance dynamics. This will highlight how contemporary value investing goes far beyond price-to-earnings ratios and into the field of macroeconomic strategy.

About the Author:

Jeremy Swenson is a disruptive-thinking security entrepreneur, futurist/researcher, and senior management tech risk consultant. Over 17 years, he has held progressive roles at many banks, insurance companies, retailers, healthcare organizations, and even government entities. Organizations appreciate his talent for bridging gaps, uncovering hidden risk management solutions, and simultaneously enhancing processes. He is a frequent speaker, podcaster, and a published writer – CISA Magazine and the ISSA Journal, among others. He holds a certificate in Media Technology from Oxford University’s Media Policy Summer Institute, an MBA from Saint Mary’s University of MN, an MSST (Master of Science in Security Technologies) degree from the University of Minnesota, and a BA in political science from the University of Wisconsin Eau Claire. He is an alum of the Cyber Security Summit Think Tank , the Federal Reserve Secure Payment Task Force, the Crystal, Robbinsdale and New Hope Citizens Police Academy, and the Minneapolis FBI Citizens Academy. He also has certifications from Intel and the Department of Homeland Security.

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Endnotes:

1. Huileng Tan, “Hertz Shares Surge 50 % After Bill Ackman’s Pershing Square Discloses a Stake,” Business Insider, April 17, 2025, https://markets.businessinsider.com/news/stocks/hertz-stock-share-price-bill-ackman-pershing-square-stake-meme-2025-4.
2. Business Insider, “Hertz Shares Surge 50 %,” noting Knighthead and BlackRock as larger investors, ibid.
3. “Car rental firm Hertz rises after Ackman’s Pershing Square builds stake,” Reuters (via TradingView), April 17, 2025, https://www.tradingview.com/news/reuters.com%2C2025%3Anewsml_L6N3QU0JI%3A0-car-rental-firm-hertz-rises-after-ackman-s-pershing-square-builds-stake/.
4. “Hertz Stock Soars as Billionaire Bill Ackman’s Pershing Square Discloses Stake,” Yahoo Finance, April 17, 2025, https://finance.yahoo.com/news/hertz-surges-ackman-pershing-square-202632370.html.
5. Huileng Tan, “Hertz Shares Surge 50 %…” Business Insider.
6. “Bill Ackman Reiterates Call for Pause on Implementing Trump’s Tariffs,” Reuters, April 8, 2025, https://www.reuters.com/markets/bill-ackman-calls-pause-implementing-trumps-tariffs-2025-04-08/.
7. Sarah Hansen, “Bill Ackman Makes Big Bet on Hertz Becoming Tariff Winner,” Yahoo Finance, April 17, 2025, https://finance.yahoo.com/news/ackman-says-pershing-owns-19-203543846.html.
8. “Bill Ackman Confirms Nearly 20 % Stake in Hertz, Floats Uber Partnership,” Investing.com, April 17, 2025, https://www.investing.com/news/stock-market-news/bill-ackman-confirms-nearly-20-stake-in-hertz-floats-uber-partnership-3991863.
9. “Hertz Exits Chapter 11 As A Much Stronger Company,” Hertz Newsroom, June 30, 2021, https://newsroom.hertz.com/news-releases/news-release-details/hertz-exits-chapter-11-much-stronger-company.
10. Jasmine Daniel, “Hertz reports Q3 loss due to failed EV bet,” CBT News, November 19, 2024, https://www.cbtnews.com/hertz-reports-q3-loss-due-to-failed-ev-bet/.
11. “Bill Ackman Confirms Nearly 20 % Stake…” Investing.com.
12. Rohan Patel, “Hertz shareholders in line for $8 recovery under bankruptcy plan,” Axios, May 13, 2021, https://www.axios.com/2021/05/13/hertz-shareholders-bankruptcy-investors-stock.