Avis equity had to be halted multiple times today after the rental car company’s stock spiked this morning, following yesterday’s release of strong 3Q21 earnings. Sources are speculating a short squeeze might be in play.  

The equity traded today at USD 535 per share on a USD 27.2bn market cap, up 212% from yesterday’s close. The stock has traded at a 52-week range of USD 28.20 to USD 545.11.

The USD 500m 4.75% senior unsecured notes due 2028 traded today at 104.375 to yield 3.665%, compared to trades at 103.75 to yield 3.818% on 29 October, according to MarketAxess.

For the quarter ended 30 September, Avis revenue totaled USD 3bn, up 96% from USD 1.534bn for the same period last year and 9% over 3Q19. Adjusted EBITDA came in at USD 1.057bn, compared to USD 220m in 3Q20 and versus USD 471m in 3Q19. 

In recent quarters, Avis benefited from increased car rental demand, as consumers jumpstarted air travel during the summer. The revenue and EBITDA increases were driven by strong pricing and sustained cost discipline, according to the press release.  

“Our third-quarter results are a testament to our team’s ongoing focus around cost discipline and ability to execute operationally,” CEO Joe Ferraro said in press release. The company is “looking to build on this positive momentum as the travel environment continues to normalize,” he added.  

Moving forward, any future disruptions in air travel could impact the company, sources said. American Airlines has been forced to cancel more than 2,000 flights since Friday due to weather issues and labor shortages. Southwest Airlines has also suffered from cancellations recently.  

As of 30 September, liquidity totaled roughly USD 1.276bn through USD 886m of cash and USD 390m of revolver availability. 

2021 Debtwire