CAR
The squeeze trade is getting side-eyed
Avis Budget Group is back in the spotlight, and not for the reasons management probably wanted. A new Fugazzi report claims the stock’s recent rocket ship rally was powered by a tightly packed short squeeze, not a sudden burst of business brilliance.
That matters because CAR has already been a wild ride: shares allegedly ripped about 500% from the $80s to a Tuesday peak near $665 before tumbling hard Wednesday. If the report is right, the tape may have been less “new era of Avis” and more “everyone crowded into the same elevator at once.”
Why investors care
The report argues that SRS Investment Management and Pentwater Capital Management built combined exposure above 100% of Avis’s outstanding shares, effectively squeezing the float. In plain English: when there aren’t enough shares floating around, the price can get yanked around like a dog on a too-short leash.
It also throws in some balance-sheet baggage — $25.3 billion of debt, negative stockholders’ equity, and a hefty pile of cumulative losses — which is not exactly the kind of backdrop that calms jittery traders.
The next catalyst is already on the calendar
Now the market gets to stare at earnings on April 29 and ask the obvious question: was this move a real re-rating, or just a momentum-fueled burp?
The stock is still up big over the past year, but when a name gets this crowded, the narrative can flip fast. Big picture: Avis doesn’t just need to report numbers — it needs to convince the market it’s more than a squeeze story with tires on it.