Pomerantz LLP announced the filing of a class action lawsuit against Pentwater Capital Management LP and its founder, Matthew Halbower, alleging they orchestrated a scheme to manipulate the market for Avis Budget Group Inc. (NASDAQ: CAR) securities. The complaint seeks damages for investors who purchased Avis stock between February 20, 2025, and April 21, 2026.

The litigation centers on claims that Pentwater leveraged its position as one of Avis’s largest shareholders to trigger a short squeeze. As of March 2026, Pentwater held an approximate 51% total economic interest in Avis through stocks and cash-settled swaps. The firm allegedly engaged in aggressive purchasing of Avis stock, causing unusual volatility and a rapid surge in price as short sellers bought back shares to cover losses.

Alleged manipulation and short squeeze

According to the complaint, the aggressive buying triggered a short squeeze that significantly increased the value of Pentwater’s holdings. Between April 1 and April 22, 2026, the market price of Avis common stock climbed dramatically, despite recent disappointing full-year 2025 financial results. The stock reached a high of $765.94 per share during intraday trading on April 21, an increase of approximately 419% from its opening price of $147.52 on April 1.

Following this peak, the share price collapsed by 74.51%, closing at $182.005 per share on April 28, 2026. On April 29, 2026, during an earnings call, Avis CEO Brian Choi disclosed that Pentwater had sold 4.3 million shares between April 22 and April 23, 2026, generating $1.75 billion in proceeds. This dumping of holdings into the market caused the share price to plunge, damaging investors.

Legal proceedings and settlement details

The case, Hakimian v. Pentwater Capital Management LP, et al., is filed in the United States District Court for the Middle District of Florida under docket number 26-cv-02275. It pursues remedies under Sections 9(a) and 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5. Recent filings emphasize that Pentwater crossed the 10% ownership threshold, becoming a Section 16 insider. On June 18, 2026, Avis disclosed that Pentwater agreed to pay $650 million to settle alleged violations of Section 16(b) regarding short-swing profits. Additionally, on June 29, 2026, Avis filed a heavily redacted copy of a complaint against Pentwater, Halbower, and related entities.

Investor eligibility and other firms involved

Eligibility is based on purchase date and documented losses, not current holding status. Investors who purchased during the Class Period (February 20, 2025, to April 21, 2026) and subsequently sold at a loss remain eligible to participate. No class has been certified yet; until certification, investors are not represented unless they retain counsel. The lead plaintiff deadline is September 29, 2026.

This filing adds to existing efforts led by Rosen Law Firm, Robbins Geller Rudman & Dowd LLP, Bernstein Liebhard LLP, Kahn Swick & Foti, and Kaplan Fox & Kilsheimer LLP. Pomerantz LLP highlights its history of recovering billions of dollars for class members. All representation is on a contingency fee basis, meaning shareholders pay no fees or expenses.

Avis Budget Group, Inc. reported second-quarter 2026 diluted earnings per share (EPS) of $0.98, missing the analyst consensus estimate of $1.80 by approximately 45 percent. The company’s quarterly revenues reached $2.998 billion, a 1 percent decline year-over-year from $3.039 billion, falling short of the $3.101 billion estimate. Despite the miss against current expectations, the reported EPS represents an 880 percent increase over the $0.10 per share earned in the same period last year, signaling a divergence between profitability recovery driven by a low base and top-line growth stagnation.

The filing highlights significant operational adjustments and financial restructuring during the quarter. Total Company vehicle utilization reached 72.6 percent, up 1.9 percentage points year-over-year, with Americas utilization hitting a second-quarter record high of 73.2 percent. To support these operations, management moved quickly to resize the fleet, protecting utilization and returns. Consequently, total company per-unit fleet costs decreased 4 percent to $290 per month, excluding exchange rate effects. CEO Brian Choi stated that the quarter demonstrated how the business is operating differently to deliver Adjusted EBITDA in line with initial expectations despite shifting booking trends.

Financial Performance Overview

Operational and Strategic Updates

Beyond core financials, Avis Budget Group advanced its strategic initiatives and capital structure. The company’s autonomous vehicle partnership with Waymo went live in Dallas, Texas, on June 1, completing thousands of trips in its first month of operation. In May, the firm issued $300 million of add-on unsecured Senior Notes due 2031, using the proceeds in June to repay a portion of its unsecured Senior Notes due 2027. Additionally, in June 2026, the company refinanced its existing $2 billion senior revolving credit facility with a new $2 billion facility maturing in June 2031 and established a new $200 million senior revolving credit facility maturing in June 2028. As of the end of the quarter, the liquidity position stood at approximately $1.0 billion, with an additional $1.9 billion of fleet funding capacity.

What the Numbers Show

The data reveals a stark contrast between earnings power and revenue generation. While adjusted EPS surged 880 percent year-over-year, driven by the exceptionally low base of $0.10 per share last year, revenue actually contracted by 1 percent. This divergence suggests that the improvement in bottom-line results is largely due to margin expansion or cost control rather than organic demand growth. The simultaneous miss on both EPS and sales estimates indicates that while the company is profitable, it is not yet delivering the scale or efficiency gains that analysts expected for this quarter. The rise in Adjusted EBITDA to $286 million, up 3 percent from $277 million in the prior year quarter, underscores the effectiveness of cost discipline even as top-line pressures persist.