'Uniquely well positioned': Hertz may become the mother of all meme stocks

Gamestop (GME) may be the poster child of the 2021 retail trading frenzy — helped, no doubt, by its own Hollywood dramatization. But the company that kicked off the meme-stock era was Hertz Global Holdings (HTZ).

After Covid crushed the car rental market in 2020, Hertz was buried under $19 billion in debt and filed for bankruptcy.

It became “one of the highest-profile corporate defaults” of the pandemic, as the Wall Street Journal reported at the time.

Then came Reddit. Within days of entering Chapter 11, the stock soared 825%, leaving legendary investor Carl Icahn nearly $2 billion lighter after he sold his stake just before the rally.

Since then, Hertz has largely drifted out of the spotlight. Its stock had been flat for much of the year. That was until Wednesday.

That’s when billionaire Bill Ackman disclosed that his Pershing Square fund had purchased 12.71 million Hertz shares, worth roughly $46.5 million.

The market response was instant. Hertz jumped 56% Wednesday on the news, then surged another 44% Thursday. The stock more than doubled from $3.65 to $8.24 in just two days. It’s now up 125% year to date.

According to FactSet, Pershing Square is now Hertz’s third-largest shareholder, behind Knighthead Capital Management and BlackRock Fund Advisors.

“Uniquely well-positioned” for the tariff era

While Gamestop continues to flounder, Ackman believes Hertz is primed for a comeback and says tariffs might help.

In a post on X, he argued that used-car prices are likely to rise due to new import tariffs. Hertz, which locked in its 2025 fleet purchases earlier this year at “attractive terms,” could benefit by offloading some of its current vehicles and replacing them with newer models.

“Hertz owns a fleet of over 500,000 vehicles valued at approximately $12 billion,” Ackman said.

“A 10% increase in used car prices would equate to a $1.2 billion gain on its auto asset, equivalent to approximately half of the company’s current market capitalization.”

That said, Hertz isn’t out of the woods. The company is facing a $272 million legal judgment tied to its bankruptcy.

Hertz's bondholders argue the company should’ve paid them interest during Chapter 11, given that shareholders received payouts. Hertz has appealed the case to the U.S. Supreme Court.