Avis triples in meme moment on plans to add more electric cars

Gabrielle Coppola and Bailey Lipschultz
Bloomberg

Avis Budget Group Inc. shares soared 218% to the highest level ever amid a flurry of retail-crazed trading, after top executives said the car rental company will play a big role in the adoption of electric vehicles in the U.S.

“You’ll see us going forward be much more active in electric scenarios as the situation develops,” Chief Executive Officer Joe Ferraro told analysts on a conference call Tuesday.

The stock more than tripled to a record $545.11 at one point in late morning trading in New York, bringing total gains for the year to a whopping 1,300%. The rapid jump in the stock price triggered at least 11 trading halts for volatility as 25 million shares changed hands -- more than 20 times what’s been seen over the past month.

The morning rally added more than $18 billion to the company’s market value, which topped the $30 billion mark. At that level, Avis briefly became the largest component of the Russell 2000 Index, surpassing another meme-stock favorite, AMC Entertainment Holdings Inc. The shares later pared some of its gains to 105% as of 2:45 p.m.  

Subscribers: Tesla-Hertz blockbuster deal paves way to take EVs mainstream

Avis didn’t disclose any plans to add EVs to its fleet after rival Hertz Global Holdings Inc. said it would buy 100,000 cars from Tesla Inc. But Avis executives said that doesn’t mean they aren’t pursuing potential deals for EVs. 

“The reason you haven’t heard from us publicly is because for competitive reasons, we like to execute on our strategy before announcing it,” Chief Financial Officer Brian Choi said on the call.

Hertz shares meanwhile added to a spectacular meme-like rally sparked by its plans to buy Tesla cars. It jumped as much as 35% on Tuesday before paring the gain to 7.3% as Tesla founder Elon Musk cast doubt on the idea. Even after the retreat, shares of Hertz still have more than doubled since mid-September. 

Tuesday’s surge came as Avis was mentioned alongside other retail-trader favorites on Reddit’s WallStreetBets thread and chatroom Stocktwits.

Mentions of the company’s ticker rivaled the likes of Tesla and GameStop Corp., the original meme, across WallStreetBets Tuesday. It was also the No. 1 trending company on Stocktwits.

Short interest for Avis has remained elevated and is near the highest level in at least a year, according to S3 Partners. About 21% of Avis’s free float is held short, S3 Partners’ data show.

Read more: Avis Surge Blasts Short Sellers With Billions in Losses, S3 Says

The mania grew so intense that TD Ameritrade stopped allowing short sales in Avis, put restrictions on custom option spreads and limited orders on short individual options.

With assistance by Esha Dey