The stock of Hertz Global (HTZ) rose 56% on news that activist investor Bill Ackman has taken a stake in the troubled car rental company.
Bill Ackman is known for taking large positions in struggling businesses and then pushing for changes that benefit shareholders.
Investors were obviously excited about the prospect of Ackman and his company Pershing Square making positive changes that will unlock value at Hertz.
According to a regulatory filing with the U.S. Securities and Exchange Commission (SEC), Pershing Square has bought 12.7 million shares of Hertz stock.
Ackman owns 4% of Hertz’s outstanding stock. That stake is worth $72.5 million U.S. based on the current share price of Hertz stock.
Hertz has gone through a difficult period over the last five years, filing for bankruptcy during the Covid-19 pandemic when demand for its rental cars evaporated.
Until its sharp rise on April 16, Hertz was trading as a penny stock defined as any security that trades for less than $5 U.S. per share.
Hertz has seen well-known investors take big stakes in its stock before, with Carl Icahn being one of the company’s largest shareholders prior to its bankruptcy filing.
Prior to the big one-day move on April 16, Hertz stock had declined 35% over the past 12 months to trade at $4.12 U.S. per share.