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Corporate boards tremble when Carl Icahn buys stock.
The New York financier targets struggling companies and shakes up management in the hopes of unlocking hidden value. Often, board and management battles erupt as a result of his aggressive moves.
But it was good news when Icahn recently acquired more shares of car rental giant Hertz. The stock of the company jumped 6% June 7, the day Icahn disclosed he boosted his stake to 15.24% of the Estero-based company.
Although Hertz needed that confidence boost from its largest single shareholder, the company's stock has languished as the car rental market softened and new competitors such as Uber have gained market share. Its stock is down 28% year to date through June 13. For the one-year period ending June 13, the stock was down 51%.
Hertz is close to spinning off its equipment-rental business, a demand Icahn made when he first started accumulating stock of Hertz in early 2014. Over the last two years, Icahn has pushed for cost cuts, gained seats on the board and engineered the appointment of CEO John Tague, the former president of United Airlines.
The Business Observer ranked Hertz as the fifth-largest company on the Gulf Coast last year, with $11 billion in 2014 revenues.
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