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On August 13, 2026, a hedge fund executive got on a call and needed less than 2 minutes to raise a rating that had taken six trading days to build. The shorts was Hertz. A week earlier, the company had beaten Wall Street's expectation and shares had jumped 85%. The man on that call worked for Bill Ackman, one of the most famous investor in America and until that morning, one of Hertz's biggest believers.
His message was simple. Hertz and Square was out, completely. Every share gone. The reason had almost nothing to do with rental car themselves. It had to do with a financing decision Hertz's own management had just made. One that looked to more than a few analysts uncomfortably familiar because this was not the first time Hertz had made a decision that looked brilliant and unraveled in slow motion in front of everyone.
The first time it involved 100,000 Teslas. Rewind to October 2021. Hertz had just crawled out of bankruptcy and its new interim CEO was familiar name in Detroit, Mark Fields, the former CEO of Ford. Fields had been pushed out of Ford in 2017, partly because the board thought he was moving too slowly toward an electric self-driving future.
Now he had a second chance to prove them wrong. Except this time, he was not betting on Ford. He was betting on Ford's biggest rival. That October, Hertz announced it was buying 100,000 Tesla Model 3s, at the time the largest electric vehicle order in history. Tom Brady signed on for the ad campaign.
Tesla stock jumped so hard the company closed a trillion dollars in value that same week. For a rental company, the match looked obvious. Buy by cars, rent them out, then sell them out here of two letter for close to what you paid. That resale value is where our rental company real profits usually hides.
Nobody had priced in one problem. The same company making Hertz cars was about to make Hertz car worthless. Tesla started cutting price on new vehicles again and again. Every cut dragged down the resale value of every used Tesla sitting on a Hertz lot. Electric vehicles also turned out to be more expensive for a rental company to run that anyone had a model.
Precious connection repairs and less demand than expected from everyday renters who just wanted a normal car. Stephen a former Goldman Sachs CFO took over as full-time CEO in February 2022. Right as the best started to soar. By January 2024, Hertz made it official. It was selling off 20,000 electric vehicles, roughly a third of its global EV fleet and going back to gas.
Two months later, Stephen resigned pointing to the EV rollout as destruction the company needed to move past. His replacement, Gil West, had assumed that fit the moment almost too well. Before Hertz, West had spent three years running operations at Cruise, General Motors self-driving a car division.
His job now was to clean up a bet on the electric future. He took a $200 million write down selling off Tesla at a loss along with the company owned charging network. It was not enough. By the end of 2024, Hertz had lost $2.9 billion for the year. By the end of 2024, Hertz had lost $2.9 billion for the year.
Its debt had climbed past $18 billion. Its equity, the cushion that protects shareholders when things go wrong had collapsed 95% down to just 153 million dollar. Hertz was not just a company that had made one bad bet anymore. It looked like a company that might not survive it. That's the moment Bill Ackman showed up.
In April 2025, Pershing Square revealed it had quietly built a stake of nearly 20% in Hertz. So quietly that Ackman had gotten special permission regulators to delay disclosing it while he bought. The stock jumped 56% in a single day. Ackman case was not about rental demand bouncing back. It was about the fleet itself.
Hertz owned roughly half a million vehicles. The market was pricing that fleet like it was worthless. When it was really worth somewhere close to 12 billion. Rising used car prices, he said could hand Hertz over a billion dollars in hidden asset value almost overnight. It was the same instinct that had made him a fortune on Chipotle years earlier.
Find the company everyone else had already written off. For a while it looked shaky. Hertz next earning report missed Wall Street estimates and the stock slipped back down. But by the third quarter of 2025, something had generally changed. Hertz posted its first profitable quarter in two years. Utilization how often its cars were actually out on the road instead of sitting in a lot hit a record 84%.
The company even built its own online marketplace to sell aging vehicles directly instead of dumping them at wholesale auction of pennies. By March 2026, Ackman went further still. Hertz fleet, he argued, was not just a pile of used car anymore. It was infrastructure, exactly the kind of assets a future built on robotics and self-driving cars would need.
It was hard to ignore the coincidence. The man now running Hertz had spent 3 years operating a self-driving car company before he ever set foot in a rental lot. Then on June 24, 2026, Hertz undercut its own story. In one announcement, the company slashed its earning guidance for the quarter, blaming a weaker used car market and unveiled a plan to raise $300 million by issuing more stock.
Shares cratered 41% that day, down to around $3. They kept falling. By August 4, Hertz hit an all-time low of $1.51, down roughly 70% from where it had traded just weeks before. Lawsuits move fast. A class action lawsuit was filed on behalf of an investor who had bought Hertz stock between May 7 and June 23, accusing the company of hiding how quickly its cash posting was actually deteriorating.
The window to join that case closes September 22, 2026, just days from now. Then right when the story looked finished, Hertz reported its second quarter earnings on August 6 that beat expectations by a wide margin. The stock nearly doubled in six trading sessions, an 85% run. For a moment, the turnaround looked alive again.
That's when Ackman walked. It turned out Pershing Square had been quietly trimming its position for months, down from nearly 20% to just over 40% by the end of March. On 13 August, the firm confirmed what had actually happened back in July. The position was completely gone. This time there was nothing quiet about the exit.
Ackman, chief investment officer, said the June financing move was unlike anything the firm had seen a company do before selling millions of shares in an overnight deal that Hertz had most nothing beyond a small lending fee. While a separate arm of company quietly raised $350 million more in debt due in 2030.
He said it had broken his firm's confidence in management judgment even while admitting he still respected the people actually running the operation. The stock dropped as much as 16% wiping out most of the rally. Hertz's total market value fell under a billion dollars almost exactly matching the roughly 984 million in liquidity the company said it had on hand.
The market was pricing everything else, the brand, the fleet, the 100 year history close to nothing. On investor forums sentiment barely moved. Traders speculated Hertz could turn into full-blown meme stock again the same way it briefly had right after it in 2020 bankruptcy propped up by a retail convinced instead of institution trust.
Hertz's next earning call in early November was already being talked about that real test. It's stories like these keep you up at night. Subscribe because this one is not over. So go back to the August phone call. The easy read in that Ackman lost faith in a rental car company. That's not quite it. Ackman built his stake by asking regulators for permission to stay invisible while he bought.
He handled it by making absolutely sure everyone knew exactly why he was selling. The real question was never about Tesla depreciating too fast or a soft used car market. It was about whether a company that had already made one expensive headline believing that on the future could prove through the smaller decision nobody was watching that it had actually learned anything from the first one.
Hertz still says its fleet is worth more than the market believes. It was right about that once already. For about 16 months, the question now is not whether Hertz can survive its next bet, it's whether anyone with real money left is still willing to fight out.
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