Hertz CEO's Message to Employees on Bill Ackman's Investment

CEO Gil West expressed his delight and motivation by the news that renowned investor Bill Ackman has invested a significant amount in the car rental giant, Hertz. This was communicated to the employees in an internal memo seen by CNBC.

These comments, which are part of the weekly message from the CEO, came just days after Ackman's firm, Pershing Square, made a substantial move that lifted Hertz's stock significantly, doubling its value by the time the market closed on Thursday.

"I want to convey my deep gratitude and encourage everyone to draw energy from the positive remarks made by Bill Ackman and the robust support we're seeing from his firm and others who believe in our strategic goals," mentioned West, who has been steering Hertz. "Such affirmation reflects our achievements and underscores the vital work each of you contributes consistently."

Hertz chose not to make any public comments about Ackman's involvement in the firm on Friday.

According to a regulatory submission, Ackman's entity had obtained a 4.1% interest by the end of 2024. Pershing then increased its holdings to 19.8% using shares and swaps, effectively positioning them as the firm’s second-largest shareholder, as per a source who spoke to CNBC.

The source mentioned that Ackman's investment body was granted an extension to report this stake, thereby allowing them to amass a more extensive position.

While West did not specify the exact size of Ackman’s investment, he portrayed it as a notably large stake.

"Joining this firm a year ago, I recognized its promise and continue to perceive its potential at every juncture. This path is challenging and won't be without difficulties ahead. However, confronting challenges is part of the journey. I am optimistic about our principal operations and confident in our distinctive role as one of the globe's leading rental and used car businesses with worldwide properties," West emphasized.

Hertz has faced several hurdles over the last ten years, with financial difficulties leading to bankruptcy amid the Covid-19 outbreak in 2020.

After emerging from bankruptcy in 2021, Hertz made a big bet on electric vehicles, which proved costly due to a drop in their resale value.

In February, while announcing its 2024 fiscal year fourth quarter results, Hertz reported a $2.9 billion loss for the year, including a $245 million deficit from electric vehicle sales in the last quarter.

Message to the Team

This week has been undeniably eventful with increased media coverage and stock activity. Numerous discussions have been sparked following the revelation of Bill Ackman's major investment in Hertz via Pershing Square Capital Management.

"I express my sincere gratitude, and we should all find encouragement and inspiration from Bill Ackman's words and the significant backing from his group and others sharing our strategic vision. This acknowledgment marks our advancement and highlights the relentless efforts everyone here delivers daily," reiterated West.

As we navigate our future path, it’s crucial to acknowledge our achievements while recognizing the substantial work ahead. Amidst all the attention, it’s easy to become distracted. Last year set the stage; we established key foundations and recalibrated our focus. This year is about realization—executing effectively for our stakeholders and customers. Staying true to our Back-to-Basics approach—particularly in fleet rotation and maintaining our primary metrics—is essential for continued success.

"Since I joined, the company's potential was apparent to me, a sentiment that has grown stronger with time. Though not an easy journey, I remain confident in our core business and our global fleet. Our commitment to deliver on promises is matched only by the strength of our people," West asserted.

Focus, discipline, and dedication are our guiding principles. If we fulfill what we've planned, promising opportunities lie ahead.

Lastly, for those celebrating Passover or Easter this holiday weekend, I wish you health and happiness. Thank you to those in the field who continue their diligent work during this bustling time.

CEO