Icahn Enterprises lost $1.6B on Hertz — a billionaire's bet wiped out by COVID

Carl Icahn, the legendary activist investor, began accumulating shares of Hertz Global Holdings in 2019, believing the car rental company was undervalued. He eventually built a stake of approximately 56 million shares — roughly 39% of the company — making Icahn Enterprises the largest shareholder.

When the COVID-19 pandemic hit in March 2020, global travel collapsed almost overnight. Hertz's business evaporated as airports emptied and rental car demand fell to near zero. The company, which had $19 billion in debt, was unable to make payments on its fleet financing.

Hertz filed for Chapter 11 bankruptcy in May 2020. Icahn's investment, which had cost approximately $2.3 billion, was largely wiped out. He lost approximately $1.6 billion, though he sold some shares before the bankruptcy filing, recovering about $700 million. Icahn resigned from Hertz's board in April 2020.

The loss was one of the largest single-stock losses for Icahn, whose activist investing style had historically generated strong returns. The case highlighted the vulnerability of even the most sophisticated investors to black swan events that destroy entire industries.