Billionaire investor Carl Icahn has sold his stock in Hertz, ending a six-year bet in the rental car firm that cost him S1.6bn.
Icahn sold all of his 55.3 million shares in Hertz which filed for Chapter 11 bankruptcy last week, according to a regulatory filing.
The legendary 84-year-old activist investor first took the position in 2014 and added more shares in the first quarter of 2020. Icahn held almost 39% of Hertz stock and exited the company at 72 cents per share on Tuesday.
“Yesterday I sold my equity position at a significant loss, but this does not mean that I don’t continue to have faith in the future of Hertz,” said Icahn said in the filing on Wednesday. “I believe that based on a plan of reorganization that includes new capital, Hertz will again become a great company.”
Hertz shares fell as much as 21% to $1.04 in late trading on Tuesday, before recovering to close at $1.31 on Wednesday. However, the firm’s rollercoaster ride continues as it is almost 17% down in premarket trading on Thursday at $1.09. The 102-year-old company’s market capitalization is around $186m.
Carl Icahn, worth an estimated $14.3bn, has three nominees on the Hertz board also. In 2014 after he first took the stake, Icahn campaigned to remove then-chief executive Mark Frissora. Hertz has had four chief executives since then.
The coronavirus pandemic has taken a toll on the travel industry. Hertz’s big debt pile also compounded its woes. Fellow billionaire investor Warren Buffett also exited all his stake in airline companies last month.
Icahn built his reputation as an activist investor, taking board positions to push for decisions he argues would add shareholder value.
He pushed Apple to increase his share repurchase plan. In 2015, he took a stake in copper miner Freeport-McMoRan. After his investment, Freeport-McMoRan sold its energy assets and some copper mines to pay off its massive debts.
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