Avis Budget Group Inc (CAR US) has rallied +92% in 2026 and +156% over the last thirty days despite larger than expected net GAAP losses last quarter, lower than expected EBITDA and increased leverage. Recent TSA-related air travel issues buoyed rental car demand which helped stir a near-term positive outlook in the stock. Large holdings by SRS Investment Mgt. and Pentwater Capital Mgt. and an online “meme-ish” bullish call on the stock helped drive CAR stock prices higher. Also driving up the bid-side of the market was short-side buy-to-covers resulting from a substantial short squeeze in the stock.

CAR Long Holdings

• Using S3’s MAP product we see $13.36 billion in reported holdings divided between $2.23 billion of passive institutional holdings and $11.13 billion in active institutional holdings.

Over the last year, we have seen passive holdings increase from $920 million to $2.23 billion and active holdings increase from $2.92 billion to $11.13 billion.

The largest passive institutional holders are Blackrock Fund Advisors ($373 million) and The Vanguard Group Inc. ($370 million).

The largest active institutional holders are fundamental based SRS Investment Mgt. ($4.55 billion) and event driven Pentwater Capital Mgt. ($2.07 billion).

The significant increase in active institutional holders has increased the potential volatility in CAR.

CAR Short Holdings

Using S3’s Black App we see that CAR short interest is $1.82 billion, 7.1 million shares shorted, 43.2% SI % Float.

Stock borrow utilization is 89% and there are less than nine hundred thousand shares available to borrow to support additional short positions. Because of this supply scarcity stock borrow rates are in the 3.25% to 4.25% fee range.

There has been 1.8 million shares of short covering, worth $429 million, in 2026. This was a -20% decrease in total shares shorted as CAR’s stock price increased by +92%.

Over the last thirty days there has been 764 thousand shares of short covering, worth $186 million. This was a -10% decrease in total shares shorted as CAR’s stock price increased by +156%.

Increased Volatility Due to Increased Active Holdings

Although CAR is not technically a Battleground Stock due to its 5.7 active long\short ratio the large amount of active long and short holdings and the fact that active long holdings have increased by almost 300% and active short holdings have increased by almost 500% over the last year makes the stock extremely volatile. Sustained upside or downside stock price movements can cause trading activity from both the long and short side. If stock prices rise, we may see more long buying drafting the momentum surge coupled with short covering due to outsized mark-to-market losses and if they decline, we may see increased long selling by those looking to realize mark-to-market profits before they evaporate and increased short selling as its price skids downward. The substantial number of shares held by active longs and shorts means that there is the potential for significant buy or sell orders hitting the tape – there is a large amount of dry powder on both sides.

Short Squeezes and Short Replacements

CAR short sellers are down -$905 million in year-to-date mark-to-market losses, down -90%, so far in 2026 which was preceded by -$240 million of mark-to-market losses, down -28%, in 2025. The recent spike in CAR’s stock price has made the last thirty days exceedingly painful with -$1.1 billion in mark-to-market losses, down -115%. These mark-to-market losses made CAR a very squeezable stock with a 100/100 S3 Squeeze Score which came to fruition with shares shorted declining by 764 thousand shares over the last thirty days. But just like we saw in GameStop in January 2021, as short sellers were squeezed out of their positions due to mark-to-market losses new short sellers came in at those higher price points. Potential CAR short sellers who did not want to short CAR at $100 or $150/share did think that shorting CAR in the $200’s was an attractive entry point.

Even though we saw CAR shares shorted decline by “only” 764 thousand shares over the past thirty days the actual amount of squeeze related buy-to-covers hitting the tape was much higher – they were just offset by new short sellers getting into their short trades at higher more attractive entry points.

One other crucial factor which will affect CAR short sellers is the higher-than-average stock borrow fees they are paying to stay in their trades. Over 90% of U.S. shorted stocks have stock borrow financing rates at G.C. (General Collateral) levels of 0.30% fee, but CAR’s financing rates are thirteen times higher at 3.88% fee today. This added expense, which is accumulated even on weekends, eats into profits and exacerbates losses. With demand to short CAR potentially increasing and the stock borrow pool limited there is a particularly good chance that CAR’s stock borrow rates trend much higher, making the squeeze risk even tighter.

Conclusion

Expect more volatility in CAR stock prices going forward, and much like NASCAR, watching the race is exciting but the crashes can sometimes be spectacular.

Want to know more? Access this data in real time using S3’s BLACK APP & BLACK MAP

The information herein (some of which has been obtained from third party sources without verification) is believed by S3 Partners, LLC (“S3 Partners”) to be reliable and accurate. Neither S3 Partners nor any of its affiliates makes any representation as to the accuracy or completeness of the information herein or accepts liability arising from its use. Prior to making any decisions based on the information herein, you should determine, without reliance upon S3 Partners, the economic risks, and merits, as well as the legal, tax, accounting, and investment consequences, of such decisions.