London - Billionaire investor Carl Icahn more than doubled his stake in Hertz Global Holdings, after the rental-car company reported third-quarter profit that badly missed estimates.
Icahn, 80, bought an additional 15.1 million Hertz shares, boosting his stake to 33.77 percent from about 15.6 percent, according to a filing Tuesday. The investor, who first revealed a stake in Hertz in 2014, was already the company’s biggest shareholder.
Hertz, based in Estero, Florida, lost almost a quarter of its market value Tuesday after third-quarter profits trailed analysts’ estimates and the company cut its annual earnings forecast. Quarterly adjusted profit of $1.58 a share was far below the average estimate of $2.73 in a Bloomberg survey, and Hertz said full-year earnings may be less than a fifth of what it projected in August.
Shares closed 23 percent lower Tuesday at $27.70, a dramatic fall from their peak of about $125 apiece in August 2014, around the time that Icahn invested.
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Hertz blamed the disappointing results in part on lower than expected resale values, primarily in compact and mid-sized vehicles. The value of such cars has been under pressure as American buyers favour trucks and sport utility vehicles.
In October alone, the wholesale prices of used compact cars fell 3.4 percent, according to Manheim, the nation’s largest used vehicle auction house.
BLOOMBERG