Avis Budget Group settled a lawsuit with hedge fund Pentwater Capital after a brutal April rally and crash. The settlement, pending court approval, will see the fund pay $650mn in cash. The dispute stemmed from Pentwater’s rapid buying and selling that triggered a 300 % surge and a 38 % intraday drop in Avis shares for investors shaken by the volatility today.

Avis’s chief executive Brian Choi publicly blamed Pentwater for the sharp decline during an earnings call, noting the fund’s sale of millions of shares. Analysts argued that Pentwater’s control of a thin public float turned Avis into a de facto micro‑cap, enabling a short squeeze that pushed the price higher before the sharp reversal in the volatile market environment that day.

Following the settlement, Avis shares surged over 10 % in after‑market trading, reflecting investor confidence in a cleaner ownership structure. The $650 million payout signals a costly lesson for large shareholders operating on tight floats. Market watchers will now focus on how tighter regulation may curb similar short‑swing abuses in the future and restore trust among institutional investors for the next quarter.