April 29 (Reuters) – Shares of Avis Budget were on track for a sixth straight session of declines on Wednesday after the car-rental firm reported a second consecutive quarterly loss and a major investor cut its stake in the company.
The company’s stock has had a roller-coaster ride this month, with shares hitting an all-time high of $847.7 on April 22 and plunging about 80% since then, in a “meme-stock” -like frenzy.
Analysts had attributed the stock’s eye-watering surge to a short squeeze – where investors betting against the company are forced to unwind their positions due to a rapidly rising share price.
Short interest on the stock last stood at around 69% of its free float, according to data analytics firm Ortex, falling from an all-time high of 94.2% of free float recorded last week.
Shares of Avis were last down 7% to $169.2, hitting a four-week low. The stock was the fifth most trending ticker on retail investor forum Stocktwits.
The Parsippany, New Jersey-based company reported a narrower first-quarter loss of $8.01 per share on Wednesday, compared with a loss of $14.35 per share a year ago.
U.S. car rental firms have continued to see steady travel demand, but profitability has been squeezed by high operating costs, rising interest expenses and elevated vehicle depreciation.
Companies such as Avis and Hertz have also been hit by losses tied to earlier bets on electric vehicles, after weaker‑than‑expected demand forced them to sell tens of thousands of EVs from their fleet, often at discounted prices, amplifying depreciation and write‑downs.
Meanwhile, filings on Tuesday showed that a majority investor, Pentwater Capital Management, had offloaded millions of Avis shares between April 22 and April 23.
Two hedge funds – SRS Investment Management and Pentwater – own more than 64% of Avis’ total outstanding shares, data compiled by LSEG showed. Pentwater had trimmed its stake from around 7.77 million shares to about 4.33 million shares.
Pentwater did not immediately respond to a Reuters request for comment.
Avis posted a 4% rise in first-quarter revenue to $2.53 billion, beating analysts’ average estimate of $2.43 billion, according to data compiled by LSEG.
As per LSEG calculations, the company clocked an adjusted loss of $7.85 per share, compared with expectations of a loss of $6.84 per share.
(Reporting by Shashwat Chauhan in Bengaluru, Additional reporting by Shivansh Tiwary; Editing by Diti Pujara)
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