Avis Budget CEO accuses major investor of triggering stock plunge

Investing.com -- Avis Budget Group Inc. (NYSE: CAR) chief executive Brian Choi accused major investor Pentwater Capital Management LP of triggering last week's sharp stock decline and potentially violating Securities and Exchange Commission rules.

Pentwater disclosed late Tuesday that it sold 4.3 million shares of Avis on April 22, immediately after the stock closed at nearly $714, a record high. The shares were sold at prices ranging between approximately $250 and $700 across multiple transactions that day.

The stock dropped about 38% on April 22, followed by another 48% decline in the next session.

Pentwater had previously helped fuel a rally in Avis shares after disclosing a large stake in the company. The announcement triggered a short squeeze, with short-sellers rushing to buy stock to close bearish positions, pushing the price up more than 600% in several weeks.

During a conference call with investors Wednesday, following Avis's wider-than-expected quarterly loss, Choi identified Pentwater as the probable cause of the reversal. "Given the quantum of shares sold in such a short span of time, our stock price experienced a significant decline," Choi said. "It seems the only insider active during this period of excess volatility was Pentwater Capital."

Choi said the company plans to "aggressively pursue" its options regarding the matter. Pentwater, which was the company's second-largest shareholder, did not respond to requests for comment.

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