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Well, friends. Welcome to IPO Market Watch. My name is Mike, and in this YouTube video I want to share many important things with you. First, it's Hertz. Today, social media will definitely be talking about Bill Ackman and the fact that he left his position at Hertz. But we'll also look at a space defense company that 99% of you have never heard of.
It has agreements with the Ministry of Defense, the Navy, the Air Force, and private companies. This is truly a very, very, very interesting company. So we're going to look at it. We will analyze this action. And as I said, we'll also cover the Hertz topic. But before we get into all that , let me explain something about the value portfolio.
This is not an advertisement for my Discord or an attempt to get you to subscribe to it. For those interested in Discord, maybe you want to subscribe or you are new and already on Discord, please pay attention to this. And those who are n't on Discord might find it interesting too. Essentially, this value portfolio is the portfolio I share with higher-level participants.
I tell them in a special Discord channel called “ value portfolio” which stocks I think are worth holding for at least a year or longer . The Value Portfolio was created in 2025 and is still actively operating. Its goal is for people to see what I consider to be the right investments to build a portfolio for many years to come that will continually grow and remain profitable.
What if someone emulated my portfolio value from last year to today, buying about 20 shares every time I posted something? This is not financial advice, and you should not blindly follow my value portfolio. But let's see what Cloud came up with. In fact, here is an analysis from Cloud on the value portfolio for our Discord: it found that if you followed everything in this portfolio for one year, you would have made a profit of 16.3% , and the percentage of winning trades in our portfolio was 71 out of 87 profitable positions.
Now, please keep in mind that some positions are still open. That doesn't mean they're unprofitable, but the success rate of this value portfolio, guys, is 82%. So, yes, Bill Eckman has exited his position at Hertz. Is this something that concerns me and should cause me to change my mind about Hertz, sell the stock, or something else?
No, I do n't care. First of all, I'm not selling anything at all . For me, it was never about Billy Ackman. I never invested in Hertz because of Bill Ackman. That's it, right? I came to Hertz for other reasons, and they are, you know, well documented in posts and YouTube videos. Having Bill Ackman at Hertz was a positive, and it was great.
And if he still held the shares, that would be a great endorsement, let's say, but no big deal. Bill Ackman started his stake in Hertz at the end of 2024 with 12.7 million shares. Then in the first quarter of 2025, he added 2 million shares, and in the second quarter of 2025, another 241,000 shares.
His thesis was based on customs duties and the used car market : prices were supposed to increase, EBITDA too, and all that. Now it's out, as we learned yesterday, August 12, 2026. I don't know the reasons why he left. I don't care. That wasn't the reason, you know, he wasn't the reason I bought Hertz.
So, from the interim report of Pershing Square Holdings Ltd. and unaudited condensed interim financial statements for the period ended June 30, 2026, released yesterday, August 12, we learned that he had exited shares of Universal Music Group, Alphabet, and Hertz. Am I going to criticize Bill Ackman and say that he's, you know, wrong, doesn't know what he's doing, and all that?
No, I will never play this game, because only fools play it . So, Bill Ackman right here, this is the point where he came out, somewhere here. This is an approximate point, right? And then the stocks crashed because we also had news about the deal with JP Morgan. Around this time, Hertz publishes its financial statements, and the stock goes up because the results were good.
In fact, in my opinion, the results were amazing. It wasn't a victory. I'm not saying it was a victory. I'm not saying that Hertz has overcome all its problems and now, you know, the company should be growing rapidly and the price should go up to $30, $40, $50 a share. No, understand? We still have a lot to work on.
One of the reasons he may have exited the position—I'm not sure—could have been Netflix, because if we look at the same report from Pershing Square, we see that he opened a new position in Netflix stock, which is very interesting. And that's what I want to focus on, not to make fun of Bill Ackman. Believe me, I'm not making fun of him.
This guy is a genius, and you know, I'm not on his level, okay? I'm not on his level. But I want to explain something to those who are panicking about Bill Ackman leaving Hertz. Bill Ackman joined Netflix in 2022. He bought Netflix in 2022 for about $1.1 billion. And just a few months after he, you know, made his purchase of Netflix, the company released one of the worst earnings reports in history.
That same year, Bill Ackman exited the position and lost $430 million. It suffered losses of $430 million in the months after joining Netflix. So, it goes on Netflix, things go badly, and it comes out the same year, right? Now, in 2026, Bill Ackman decided, "I'll try again." The same thing happened with Carvana.
If you knew and followed Carvana, it was trading around $69 per share in 2021. And then things got really, really bad with debt. Debts were growing, profits were getting worse, revenue momentum was falling, and profitability had to be forgotten. The situation was simply terrible. Rumors started circulating that Carvana was going bankrupt, right?
It was around 2021 to 2022 when there was talk of Carvana going bankrupt. Did Bill Ackman go into Carvana then? No, he never did that . This proves once again that, you know, we don't know everything and we can't base our investments on the actions of one institutional investor. But many suffered losses at Carvana.
Institutions suffered losses at Carvana. Carvana shares fell to a dollar and forty cents, $1.40, maybe even less , but it was definitely $1.40. So from $70 you drop to 1.40, right? And with the news that Carvana is going bankrupt, I, I remember that year. I remember 2022, Carvana was trading at super low levels, and I was afraid to go in.
Personally, I was afraid. I didn't do my own research, did I? And I let the mainstream media speak, whether at the lowest level of private investor conversations or at the highest institutional level . All this talk about bankruptcy, bankruptcy, and from the company itself, you know, things were looking really bad.
I didn't enter. I avoided Carvana, thinking it was death. Today, in 2026, we know that Carvana shares are trading at $70, right? That's a gain of about 7,000%, and no, they didn't do a reverse stock split. So, to give you a better idea of what I'm talking about, here's a graph of Carvana's entire history, and this was in 2021.
The stocks began to fall rapidly, dropping to a dollar with something like this. Right at this point, guys, right at this point, and some even lower, there were big institutional investors who crashed and sold at a loss, but they didn't know what was happening. They didn't know that Carvana, you know, with new leadership, new strategy and all that, would turn things around and then have a 7,000% profit.
Hertz, before Gil West arrived, did not have good management. They had terrible management and made terrible decisions. Gil West was hired to turn things around, and why my faith in Hertz should be shaken, and my bullish thesis, my bullish faith in Hertz, especially now, after we've had some great earnings.
So , the key to Hertz's success is Gil West. This was the main reason I invested in Hertz—Gil West. So today I'm going back to basics again and thinking to myself, "What do I care about Bill Ackman? I mean, like I said, it would be nice if Bill Ackman stayed, but, you know, I wasn't here because of him.
I was here because of Gil West. And it is he who will decide whether Hertz has a "bullish" or "bearish " future. Now let me highlight something about the second quarter earnings, and some people are talking about this, you know, I see it all the time everywhere, which is just ridiculous. People, when you talk about Hertz and its debts, you should either do your homework or keep quiet, right?
Do your homework or don't talk at all . When we talk about debt, they say Hertz has $18 billion in debt. They don't have $18 billion in debt. That's 12-something billion in debt tied to vehicles , which can easily be paid off by selling any car. So, in reality, Hertz's real debt is 6 something. I think it's $6.3 billion.
When you have $6 billion in debt, but you are unprofitable and operations have been unprofitable, then yes, it can lead to bankruptcy. Why shouldn't I worry anymore? At least for now. We did n't win, as I said, there are no big victories yet, but why shouldn't we worry? Because they're targeting metrics, as Gil West said in the second quarter report, we're still on track to $1 billion in adjusted EBITDA in 2027.
And then he added that we'll have a full year in 2027, right? A full year of net profit and positive free cash flow in 2027. How can they be profitable in 2027 in terms of net income and free cash flow if they have $6.3 billion in debt and are considered a bankrupt company. Well, that's impossible. You can still come out with a net profit and free cash flow.
They have n't done it yet, but if they do in 2027, the stock will be worth over $10. Now look. How is this possible? So, most of the debt, as I said, $12.7 billion, is auto refinancing, not corporate debt. These are assets secured by the fleet itself. So I'm not worried about that. You can have positive free cash flow even with a huge debt load if operating cash generation, EBITDA growth, working capital terms, and asset sales exceed capital expenditures and interest expenses in a given year.
If they can implement this point, I want you guys to pay attention to it. This is it. That's all you need to worry about. The whole key to Hertz's success lies precisely in this point. If they get it right by 2027, the stock will be worth over $10, period. That's all they have to achieve. They need to do it right.
So, for now, I have briefly covered the value portfolio and updated information regarding Hertz. Now let's move on to the company going public— LYNX Incorporation, ticker LYNX. This IPO will cost about $21 per share, let's say. 24 million shares are being offered . It is a leading defense technology company providing sensor-to-action communications solutions for the modern connected battlefield.
Their solutions allow US and allied warfighters to detect threats earlier, make decisions faster, and act with precision in competitive multi-domain environments. Their solutions are developed within three key areas of rapid growth: maritime monitoring , air and missile defense , and space intelligence along with surveillance, reconnaissance, and persistent communications.
If you look at the company's revenue, it has been growing since 2024 and reached $450 million. Cash increased to $34 million in profit. Although it's not much, and it would be much better if they had more cash. Hopefully, after this IPO, they will improve their cash position. Net income is minus 11.8, and their free cash flow is plus $17.2 million.
Because our current US president is focused solely on Iran, completely forgetting about many of the basic things that the United States itself needs within its borders. I think LYNNX L3Harris Corporation will probably have good opportunities over the next 3 years. This is a defensive stock that I think should perform well, but the market cap is $2.3 billion , which is typical for an IPO.
They always bring these companies to the market at an inflated valuation so that early investors can sell the shares and make a profit. There is a 180-day period during which insiders cannot sell shares. As for Bill Eckman, yes, he left Hertz, but that's not what concerns me. I invested in Hertz because I bet on CEO Gil West that he would succeed .
Thank you very much for watching this video on YouTube. Let me know in the comments below if you still believe in Hertz, and I wish you all the best. Take care of yourself.
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