Avis Budget Group Stock Plunges 70% After 600% Rally Fizzles
Avis Budget Group’s stock erased almost all of a 600% rally when it plunged 70% over two days after it announced an April 29 Q1 earnings date. The collapse intensified fears that up to 5 million shares could be sold through an at-the-market offering, diluting existing shareholders.
1. Rapid Short Squeeze Surge
In March, speculative buying by short sellers drove a classic short squeeze that sent Avis’s stock up 600% in just four weeks as investors rushed to cover borrowed shares.
2. Swift 70% Decline
Over Wednesday and Thursday, the stock plunged nearly 70%, wiping out almost all gains as traders exited positions and supply rebounded.
3. At-the-Market Offering and Dilution Fears
Avis filed for an at-the-market equity offering of up to 5 million shares, triggering concern among investors that new issuances would dilute existing holdings.
4. Early Q1 Earnings Announcement
The company moved its first-quarter earnings date to April 29, fueling speculation that management planned to capitalize on elevated prices for fundraising.