“Unfortunately because of Covid-19 which has caused an extremely rapid and substantial decrease in travel, Hertz has encountered major financial difficulties and I support the Board in their conclusion to file for bankruptcy protection,” Icahn said in a Securities and Exchange Commission filing released on Wednesday.
“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,” he continued. “I believe that based on a plan of reorganization that includes new capital, Hertz will again become a great company.”
Icahn added that he will “closely follow” Hertz’s reorganization and plans to consider different ways to support the company in the future.
The activist investor first bet on Hertz in 2014 with the goal of pushing for changes to improve the company and boost its value. He unveiled a stake of 38.8 million shares valued at $985 million at the end of the third quarter that year.
Icahn eventually grew his holdings to 55.3 million shares at the end of last quarter, making him Hertz’s largest shareholder. However, the company’s tumbling stock price slashed the value of his shares to just $342 million at the end of March.
The billionaire sold the whole stake at an average price of $0.72 a share on Tuesday, netting less than $40 million, the SEC filing on Wednesday showed. A previous SEC filing in March pegged his total spending on Hertz shares at $1.88 billion, putting his ultimate loss at more than $1.8 billion.