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What happened: Avis Budget Group’s stock (CAR) tanked more than 50% on Thursday, extending losses for a second day in a row.
What’s behind the move: Shares of the car rental company have been in the midst of an epic short squeeze. The stock has surged roughly 600% since March and reached 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 reversed as the short squeeze ran out of fuel, sliding further after briefly spiking to an intraday high of nearly $850 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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