Shares of Avis double in single day as huge earnings beat sends hedge fund shorts running

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Avis Budget $CAR and Bed Bath & Beyond $BBBY shares soar. But which came first: was it a meme-stock that led to a short squeeze or did retail investors fuel the fire? LesliePicker discusses the latest chicken and egg situation.

A customer boards an Avis Budget Group Inc. shuttle bus at the Denver International Airport in Denver, Colorado, U.S., on Wednesday, Oct. 28, 2015.surged Tuesday after the company reported a stronger-than-expected third quarter that sparked massive trading volume.

The stock closed 108.3% higher Tuesday at $185.7%. Trading in the stock was halted multiple times Tuesday morning, and it was up more than 200% for the day at one point. Ahead of the earnings report, 20.5% of the float of Avis Budget's stock was sold short, according to FactSet, an abnormally high number. When a stock rises, short-sellers are forced to cover their positions by buying shares, creating more upward pressure on the stock price. This is called a "short squeeze."

Brokerage firm TD Ameritrade instituted trading restrictions on the stock on Tuesday, including limiting certain options strategies and blocking short-selling.

 

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Stocks don't get more Meme than AvisOPINION: “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,” ThorntonMcEnery writes. ThorntonMcEnery good ThorntonMcEnery i can assure u this wasn’t wsb
Source: MarketWatch - 🏆 3. / 97 Read more »