Bill Ackman's Pershing Square has disclosed acquiring a nearly 20% stake in Hertz Global Holdings, amounting to approximately 12.7 million shares. The announcement triggered a surge in Hertz's share price, with the stock rallying 112% following the news. Directional call options activity was also observed around the time of the disclosure. Hertz, which recently reported a loss of nearly $2.9 billion last year and carries over $6 billion in debt, has struggled with depreciation of its vehicle fleet, particularly after a large-scale purchase of electric vehicles. Ackman has expressed confidence in Hertz management's ability to execute an operational turnaround by remaking the fleet, cutting costs, and increasing unit revenue. In a letter to employees, Hertz's CEO addressed Ackman's significant stake. A key factor in Ackman's investment thesis is the potential impact of a 25% tariff on imported automobiles, which could significantly raise the value of Hertz's fleet of roughly 500,000 vehicles, estimated at $12 billion. Ackman noted that a 10% increase in used car prices would translate to a $1.2 billion gain for Hertz. Hertz is also facing a $300 million lawsuit from bondholders related to its 2020 bankruptcy. Ackman mentioned the possibility of a partnership with Uber, which received a positive response from Uber's CEO. There is uncertainty as President Trump is reportedly considering pausing or granting exemptions to the tariffs. After the initial rally, Hertz shares fell 12-13%, with premarket trading showing a 13.1% decline, giving back some of the gains.