Carl Icahn, 80 year-old billionaire investor, has more than doubled his stake in Hertz Global Holdings. A day after Hertz announced they missed their projected earnings by a huge margin, investors have started dumping the car rental company's stock. Everyone except Carl Icahn. Already the biggest shareholder, and in an explicit show of support for John Tague, the CEO of Hertz, Icahn doubled his stake in the company. Icahn had brought Tague,a former executive from United Airlines, to power late 2014, a few months after Icahn had successfully fought to obtain three director seats. Hertz adjusted shares have fallen over 70 percent since then, including Tuesday's 23 percent drop that erased $739 million in equity value. They lost $8.04 per share to $27.70 on Tuesday and in early trading Wednesday had slipped an additional 2.5 percent to $27.01.
CEO John Tague said in a press release that the company is still aiming to cut costs in the long run. "A customary vehicle depreciation rate review near the close of the third quarter resulted in a substantial depreciation adjustment, particularly on compact and mid-sized vehicles, that together with rental volume at the low end of our expectations as well as higher net operating and administrative expenses impacted our performance." So higher depreciation value on used cars, low traffic flow and high expenses. Icahn has raised his stake to 33.77 percent from about 15.6 percent. He's also one of the biggest holders of Herc Holdings Inc., the equipment rental company that separated in June. Icahn's show of faith is not shared by everyone. "The problem is management," said Maryann Keller, an independent consultant in Stamford, Connecticut. "The company was dysfunctional under previous management. It chose a CEO who has no experience in the rental industry. They were bound to stumble."