In late April, Avis Budget shares surged more than 480 %, peaking at $847.70 and lifting the company’s market cap from $5 bn to over $26 bn in a single month. The rally roiled the market and set the stage for a dramatic pullback.

Short sellers, who had wagered against Avis, saw their positions collapse. By April 21, they had booked mark‑to‑market losses of $5.8 bn as the stock climbed. The squeeze intensified when hedge fund Pentwater Capital amassed millions of shares and exercised options, shrinking the float and forcing cover.

Pentwater’s stake, worth nearly $6 bn, dwarfed the $15 bn value of SRS Investment Management’s holdings. With 54 % of the float shorted, short sellers were compelled to buy back shares, propelling the price higher in a classic squeeze.

Unlike meme‑stock rallies, retail investors trended toward profit‑taking, while institutional players dominated. The episode underscores how concentrated positions can ignite sharp volatility, costing billions to short sellers and reshaping investor strategy.