That car rental stock is on fire!…No not that one, the other one.
Shares of Avis Budget Group Inc.
CAR,
rocketed up as much as 212% on Tuesday thanks to a corresponding surge in social media interest in what may be a rather heavily shorted ticker.
Or as we here at MemeMoney call it: The perfect recipe for a meme stock.
In fact, the only thing that takes away from Avis’ meme bona fides is that the stock is also moving on news that the car rental company blew away analyst estimates for its most recent quarter after the closing bell on Monday, touting some pretty massive growth numbers as the car rental business appears to be crawling out of the pandemic.
But a solid quarter doesn’t often result in a stock tripling in the first 90 minutes of a trading day, unless of course it catches fire on social media in the year 2021.
And Avis did just that on Tuesday. According to HypeEquity, mentions of CAR on social media grew by a mind-numbing 36,300% on Tuesday as retail investors smelled a short squeeze opportunity on a ticker that Fintel ranks in the top 12% of highly shorted stocks .
Reddit’s army of “Apes” were not shy about the Avis rocket ship move on Tuesday.
“For all y’all morons, this is what a short squeeze looks like, done,” user Disposable_Canadian posted on Reddit board r/Shortsqueeze. “Shorts had their pants pulled down hard and fast. No recourse other than to cover driving a 171 share price up to 535.”
So violent was the action in Avis shares that they managed to push the entire Dow Jones Transportation Average
DJT,
up more than 1,000 points at one point Tuesday.
But if, dear reader, you are still not convinced that Avis is a meme among memes, consider that the stock has also been impacted by the ultimate metaphysical force that can touch a meme stock — an Elon Musk tweet.
The Lord of all Memelords definitely played a role in the Avis rally on Tuesday after he tweeted his thoughts on how a widely-reported Tesla deal with Hertz Global Holdings Inc.
HTZZ,
had pushed the electric car maker’s
TSLA,
stock up more than $125 in the last week.
“If any of this is based on Hertz, I’d like to emphasize that no contract has been signed yet,” tweeted Musk, who is also the CEO and founder of Tesla, replying to a tweet that tied Tesla’s price rise price to news that Hertz had agreed to buy 100,000 Teslas.
“Tesla has far more demand than production,” read Musk’s tweet. “Therefore we will only sell cars to Hertz for the same margin as to consumers.”
Hertz was quick to clarify Musk’s very public musings, releasing a statement that said in part, “Deliveries of the Teslas already have started. We are seeing very strong early demand for Teslas in our rental fleet, which reflects market demand for Tesla vehicles.”
But the confusion was enough for many retail traders to hedge on Hertz and throw in their lot with Avis on a nice little short squeeze, and by mid-afternoon social media was alight with posts claiming that TDAmeritrade had suspended short selling of Avis stock, creating even more militant interest in keeping the stock squeezed.
And like any big meme squeeze, retail investors began to look for a new shot at squeezing one of the bigger names and finally achieving the Ape holy grail of a #MoASS (Mother of All Short Squeezes).
“Almost no shares available to short [Gamestop]
GME,
at Interactive. The squeeze will make CAR look like a squeeze for ants,” tweeted @BearMcBearFace3 Tuesday afternoon. “Nothing will stop us this time.”
This post was originally published on Market Watch
