Avis Budget has reached a $650 million settlement with Pentwater Capital Management to resolve a lawsuit over stock volatility. The car rental company said late Monday it would collect the payment from the hedge fund, which it accused of fueling excess volatility in Avis' shares earlier this year.

Avis stock experienced wild swings in 2024, surging 560% year-to-date at its peak before reversing course sharply in subsequent days. The volatility coincided with a notable short squeeze that sent shares spiraling upward before quickly reversing.

The settlement resolves Avis' pending lawsuit against Pentwater Capital and requires court approval. Pentwater's founder, Matthew Halbower, did not immediately respond to requests for comment.

This unusual resolution highlights tensions between public companies and major shareholders over trading activity that can destabilize stock prices. The $650 million payment represents a significant sum for the car rental firm to receive.