Avis (CAR) shares went parabolic on Tuesday, spiking 200% before giving back some of those gains in intraday trading on Tuesday.
The rental car company stock was repeatedly halted for volatility but continued to soar, hitting record highs before retreating.
The massive move comes after Avis Budget reported a better than expected quarter with record net income and revenues of $3 billion, almost double the prior year. Avis Budget's adjusted earnings per share were $10.74, far above analyst estimates and 850% higher year-over-year.
A possible short squeeze on the stock also may be a factor as short interest has increased over the last month, according to S3 Partners. The most current data shows 21.10% short interest as a percentage of float.
"CAR was already had a 100/100 score in our Short Squeeze metric prior to today’s price move," Ihor Dusaniwisky of S3 Partners told Yahoo Finance. "It will most certainly remain at a 100 score and we should see today’s short squeeze forcing some existing shorts to close out all or part of their CAR positions,"
Some of Tuesday's upward movement may also be fueled from management comments hinting at electrifying the company's fleet in the future.
“You’ll see us going forward be much more active in electric scenarios as the situation develops over time," CEO Joe Ferraro told analysts on the company's earnings call Tuesday morning.
Avis's CFO Brian Choi said, “The reason you haven’t heard from us publicly is because for competitive reasons, we like to execute on our strategy before announcing it."
The comments come after Hertz Global (HTZZ) recently announced it placed an order of 100,000 (TSLA) cars in a move to electrify its fleet.
On Tuesday morning shares of the electric vehicle giant opened lower after CEO Elon Musk tweeted no contact with Hertz had been signed yet.
Hertz responded in statement which read, in part: "Deliveries of the Teslas already have started, and consumer reaction to our commitment to lead in electrification has been beyond our expectations."
Avis's stock was trading at around $374 per share by mid-session on Tuesday. The average price target on the stock was $130 prior the company's earnings release on Monday afternoon.
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