What happened

Shares of Hertz Global Holdings (OTC:HTZG.Q), a vehicle rental company with the brands Hertz, Dollar, Thrifty, and Firefly, declined over 14% Tuesday morning after activist investor Carl Icahn cut his stake.

So what

Icahn disclosed Tuesday morning that he sold roughly 5 million Hertz shares on Monday. The sale was priced at $19.45 per share, a small discount to its opening price Monday. For context, Icahn is still Hertz' largest shareholder by a long shot with 24.26 million remaining shares, versus the second- and third-largest shareholders, with 5.89 million and 5.68 million shares, respectively.

Check out the latest earnings call transcript for Hertz Global Holdings.

Car rental sign at airport.

Image source: Getty Images.

Now what

Sure, the stock is declining as investors see the company's largest shareholder trimming his stake as a negative, but there might be more to it. While this is speculation, investors could interpret Icahn's selling of 5 million shares as a sign he sees a buyout as less likely now. Remember that Hertz stock soared in November 2018 on buyout rumors before cooling. And if a buyout is less likely, some investors owning shares on speculation could be getting out of the stock. 

Whether Hertz is in a better or worse position to be bought is speculation that doesn't serve investors well. And while it's not a great look for the company's largest shareholder to trim his stake, that's also out of their hands.

Rather than focusing on those factors, investors should keep tabs on management's ability to sustain top-line momentum through disciplined fleet management and brand-building marketing, and improving operations for better financial results.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.