Avis (CAR) shares went parabolic on Tuesday, spiking 200% before giving back some of those gains in intraday trading on Tuesday. The stock closed up 108%, at $185.71 per share.
The rental car company stock was repeatedly halted for volatility but continued to soar, hitting record highs before retreating.
The massive move comes after Avis Budget reported a better than expected quarter with record net income. Avis Budget’s adjusted earnings per share came in at $10.74, far above analyst estimates.
A short squeeze was also likely at play as short interest has increased over the last month, according to S3 Partners. The most current data shows around 21 % short interest as a percentage of the float.
“CAR is the second largest short in the domestic Trucking sector,” said Ihor Dusaniwisky of S3 Partners.
“While shares shorted have been climbing since mid-April, it was not until August that we saw CAR short selling increase in earnest,” he added.
Some of Tuesday’s upward movement may also be fueled by comments from management hinting at electrifying the company’s fleet in the future.
“You’ll see us going forward be much more active in electric scenarios as the situation develops over time,” CEO Joe Ferraro told analysts on the company’s earnings call Tuesday morning.
Avis’s CFO Brian Choi said, “The reason you haven’t heard from us publicly is because for competitive reasons, we like to execute on our strategy before announcing it.”
On Tuesday morning shares of the electric vehicle giant opened lower after CEO Elon Musk tweeted no contract with Hertz had been signed yet.
Hertz responded in statement which read, in part: “Deliveries of the Teslas already have started, and consumer reaction to our commitment to lead in electrification has been beyond our expectations.”
Avis’s stock was trading at around $374 per share by mid-session on Tuesday. The average price target on the stock was $130 prior to the company’s earnings release on Monday afternoon.
This post has been updated to better reflect the intraday share price.