Carl Ichan cuts stake in Hertz
Carl Icahn, one of the most influential activist investors, reported yesterday that his fund has cut its stake in Hertz Global Holdings (HTZ). As reported by CNBC, Icahn reported 24.3 million shares of Hertz in his portfolio, implying 28.9% of the stock’s outstanding equity value, down from 35% previously. The activist investor is still Hertz’s biggest shareholder. Icahn’s stake sale comes after Hertz’s stock jumped ~46% in 2019 after underperforming the markets (SPY) (DIA) with a fall of 38% in 2018. Hertz provides car rental services.
Hertz stock tanks
As of 10:20 AM EST today, Hertz stock was trading down by more than 14% mainly on the stake sale by its largest investor. Icahn has been instrumental in reshaping the company. As reported by CNBC, “Icahn has overseen the introduction of two Hertz chief executive officers since his initial investment and has successfully won board seats at the company while building his position.” Icahn recruited Hertz’s current CEO, Kathryn Marinello, more than two years ago to turn around the company. Icahn Associates first disclosed its stake in Hertz in August 2014. The fund took an 8.48% stake in Hertz when the company was going through a series of accounting issues.
Icahn’s investment performance
While 2018 turned out to be a dismal one for most hedge funds, Icahn’s investment fund returned 7.9% in 2018. David Einhorn’s Greenlight Capital (GLRE) suffered its worst year in its 22-year history with annual losses of 34% in 2018. Daniel Loeb’s Third Point lost 11.3% in 2018. Bill Ackman’s Pershing Square outperformed the broader markets with a loss of just 0.7% in the year. In contrast, Ray Dalio’s Bridgewater flagship fund, Pure Alpha, outperformed the markets (IVV) with 14.6% gains in 2018.