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Activist investors most of the time know what they are getting into. Often they buy a large stake in a troubled company and pressure it to turn itself around. Apparently Hertz couldn’t turn on a dime, and lost Icahn $40 million in one day, according to Marketwatch.
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Hertz has been a troubled company, and according to the motto of its main competitor Avis, needed to try harder. It is under new management, has significant debt and has had accounting headaches, but the news that it had to restate 2011 earnings as well as 2012 and 2013 results sent the stock into a tailspin on Friday, and it lost 14%.
This really hurt Carl Icahn, who bought a stake in the company because it was undervalued. Well, undervalued it was, but the question is, will it remain undervalued?
