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What happened: Avis Budget Group’s stock (CAR) tanked more than 40% on Thursday, extending losses for a second day in a row.
What’s behind the move: Shares of the car rental company are coming off an epic short squeeze. The stock surged nearly 600% since March, reaching a record close just above $713 earlier this week, as short sellers betting on a decline were forced to cover their positions.
On Thursday, the trade continued a reversal as the short squeeze ran out of fuel, sliding roughly 70% from its intraday high of about $847 in the previous session.
What else you need to know: The rally began after one of Avis’s largest shareholders, Pentwater Capital Management, disclosed last month that it had built a large position in the company. According to Bloomberg data, Pentwater owns a roughly 20% stake.
The move higher also underscores market euphoria for meme stocks as the broader market notched all-time highs this week.
Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.
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