Avis Budget Stock Crashes 72% in 26 Hours as Hedge Fund Short-Squeeze Unwinds

Avis Budget Group, a traditional rental-car company that had turned into a meme stock driven by hedge funds, plummeted by 72% within approximately 26 hours, dropping from an intraday peak of $847 to $229. Since early March, the stock had surged by 770% due to a significant short squeeze fueled by hedge funds competing against one another, rather than retail investors. By March 25, SRS Investment Management and Pentwater Capital Management held substantial long positions, comprising 70% of the outstanding shares, with SRS owning around 50% and Pentwater acquiring a 20% stake, alongside cash-settled equity swaps. The dramatic price surge was prompted by intense buying pressure amid a short interest exceeding 62% of the float. The decline only partially reverses the earlier spike, with early shorts facing losses while later shorts gain, and late retail investors currently at a loss.