Carl Icahn disclosed an 8.48% stake in
A Securities & Exchange Commission filing showed that Icahn had been building a stake in Hertz using call options throughout July and August and added to that position on Wednesday after shares of Hertz plunged by some 11%. The disclosure of Icahn’s activist position in Hertz caused shares of the company to rebound sharply and shares of the company ended the day down only 3.9% after closing at $30.33.
Icahn said in the SEC filing that he thought shares of Hertz were “undervalued.” Icahn said he intends to have discussions with representatives of Hertz’s board of directors about “accounting issues, operational failures, underperformance relative to its peers” and “lack of confidence in management.”
Icahn is not the only prominent investor that criticized Hertz’s management on Wednesday. Several big shot hedge fund managers have bet on Hertz’s stock and one of them, Jeffrey Tannenbaum of Fir Tree Partners, now wants Hertz CEO Mark Frissora to be removed from running the company, according to
Hertz has recently reported a slew of problems. The company said on Tuesday evening that earnings would come in “well below the low end of its 2014 guidance” because of “operational challenges” and costs related to its accounting review. Among other problems, Hertz said its rental car fleet had been hit by vehicle recall activity that had limited the number of cars it could rent to customers.
Hertz had already delayed the filing of its second-quarter financials pending the review of its financial records. In June, Hertz had concluded there were problems with the company’s financial statements for the last three years that would need to be corrected. Earlier in 2014, the company had said it found tens of millions of dollars of accounting mistakes.
