A Hertz Tesla electric vehicle is displayed during the Hertz Corporation IPO at the Nasdaq Market site in Times Square in New York City, U.S., November 9, 2021.
Brendan Mcdermid | Reuters
Hertz Global CEO Gil West is “encouraged” and “energized” by prominent investor Bill Ackman taking a “significant” position in the post-bankrupt rental car company, he said Friday in an internal message to employees viewed by CNBC.
The remarks, part of a weekly CEO message to employees, come two days after Ackman’s Pershing Square disclosed a sizable stake in Hertz — pushing shares of the car rental company to more than double during trading this week and close Thursday at $8.24 per share.
“Let me start by saying I am humbled, and we should all feel encouraged by Bill Ackman’s comments and energized by the strong support shown by him, Pershing Square Capital Management, and others who share confidence in our strategy,” said West, who started leading Hertz in April 2024. “This endorsement is a testament to our progress, and importantly, the relentless effort each of you contributes every day.”
Hertz declined to comment Friday on Ackman’s stake in the company.
A regulatory filing revealed Pershing Square had built a 4.1% position as of the end of 2024. Pershing has significantly increased the position — to 19.8% — through shares and swaps, becoming Hertz’s second-largest shareholder, a person familiar with the matter told CNBC’s Scott Wapner.
The person said Ackman’s investment firm received an exemption from the U.S. Securities and Exchange Commission to delay the filing of the position until Wednesday, which allowed it to accumulate substantially more shares.
West did not disclose Ackman’s total position in the letter, which comes nearly four years after Hertz emerged from Chapter 11 bankruptcy, but he described it as a “significant position” in the company.
“When I joined this company a year ago, I saw its potential clearly—and continue to see it every step of the way. There’s no doubt this journey hasn’t been easy, and the path ahead won’t be easy either. But we didn’t sign up for easy. I remain bullish on our core business and confident in our unique position as one of the world’s largest rental car companies and used car dealers, with assets and real estate around the globe,” West said.
Hertz has been a troubled company for much of the past decade, facing bankruptcy during the Covid-19 pandemic in 2020.
Following its emergence from Chapter 11 bankruptcy protection in 2021, the company bet heavy on all-electric vehicles, specifically Teslas, which cost the company billions following a significant decline in their residual values.
When reporting its 2024 fourth-quarter earnings in February, it revealed a $2.9 billion loss for the year, which included a $245 million loss on the sale of electric vehicles during the fourth quarter.
The company during the quarterly call said it completed the sale of 30,000 EVs last year that were part of the failed EV strategy, further shifting focus to its ongoing business turnaround plan under West.
West’s message to employees on Ackman’s stake in Hertz:
Team,
This has undoubtedly been a busy week, both in the media and with our stock. As many of you have seen, we garnered substantial attention following the disclosure that prominent investor Bill Ackman has taken a significant position in our company through his fund, Pershing Square Capital Management.
Let me start by saying I am humbled, and we should all feel encouraged by Bill Ackman’s comments and energized by the strong support shown by him, Pershing Square Capital Management, and others who share confidence in our strategy. This endorsement is a testament to our progress, and importantly, the relentless effort each of you contributes every day.
As we chart our path forward, we should be proud of the progress we’ve made but also recognize there is still significant work ahead. It is easy to become distracted amidst all this attention. Remember, last year was foundational. We laid critical groundwork, established new processes, and reshaped our focus. This year is about execution and delivering tangible results for our customers and our shareholders. We must remain firmly committed to our Back-to-Basics strategy, particularly our disciplined fleet rotation and achieving our North Star Metrics of DPU (depreciation per unit/vehicle) <$300, RPU (revenue per unit/vehicle) >$1500 and DOE (direct operating expense) in the low $30s. These areas, as we know, will lay the foundation for Hertz’s sustainable long-term success.
When I joined this company a year ago, I saw its potential clearly—and continue to see it every step of the way. There’s no doubt this journey hasn’t been easy, and the path ahead won’t be easy either. But we didn’t sign up for easy. I remain bullish on our core business and confident in our unique position as one of the world’s largest rental car companies and used car dealers, with assets and real estate around the globe. Our strength lies not only in our assets but also in our people and our unwavering commitment to delivering on our promises.
Stay focused, disciplined, and committed. If we execute on what we set out to accomplish, the opportunities ahead of us are truly endless.
Finally, to those observing Passover or Easter this weekend, I wish you a happy and healthy holiday. And to those in the field supporting our customers during this busy holiday season, thank you for your continued hard work and dedication.
Gil West
Chief Executive Officer