Why you should listen to me: I’m highly regarded and in charge of helping the White House price calculate percentage changes
Rewind to mid-March. Avis was worth about $120 per share, with 35M shares, for a market cap of $4.2B. Management probably thought that number was a bit high, and put together a 5 million share secondary offering. But let’s assume that $4.2B is fair valuation.
It then got short-squeezed and spiked. Let’s say management timed things spectacularly, and sold 5M shares at $400 each. This would add $2B in cash to their balance sheet.
So the new expected market cap should be roughly $6.2B. Divide that number by 40 million shares (35M shares from before + 5M new shares) and you get $155/share.
This is the best-case scenario, where management timed things inhumanly well and where we ignore the warning signs that management thought their stock price was too high at $120/share.
TL;DR: CAR should probably still crash a bit further.
Position: $180 puts, 5/1 expiry (I sold my $240 puts)