Why Avis Budget Group Stock Veered off Course Monday

By Eric Volkman – Mar 30, 2026 at 7:12PM ESTKey PointsThese will be sold from time to time in a public offering.Investor fears of dilution were justified, to a degree.Avis Budget Group (CAR 8.68%) is going to the well for new financing, and investors weren't happy about it. On Monday, they traded out of the stock to leave it with a nearly 9% loss that trading session. The main reason why is that the company announced it's planning a new, secondary share issue. A hard tap on the brakes Late Friday, Avis disclosed in a regulatory filing that it has entered into an equity distribution agreement to potentially float up to 5 million shares of its common stock. Those sales could take place from time to time, and will be effected in at-the-market offerings (i.e., sales to the public at current market prices). Image source: Getty Images. The auto rental company said it intends to use its share of the issue's proceed's for "general corporate purposes." Among other uses, this could mean debt retirement, acquisitions, and share buybacks. The sales agents for the issue include Bank of America Securities, and Morgan Stanley. They will be compensated up to 2% of the gross sales price for the shares they transact. ExpandNASDAQ: CARAvis Budget GroupToday's Change(-8.68%) $-12.89Current Price$135.56Key Data PointsMarket Cap$5.2BDay's Range$131.08 - $146.0852wk Range$62.16 - $212.81Volume2.2MAvg Vol750KGross Margin25.19% Dilution worries Avis, which has been aggressively promoting a springtime discount deal lately, is probably eager to capitalize on the recent chaos at U.S. airports to push the idea of driving as an alternative. Yet the recent fix that ensures Transportation Security Administration officials get at least their back pay is relieving the mess; meanwhile, rising oil prices mean higher pump prices. So the "airport chaos effect" might not end up benefiting Avis so much, after all. Any secondary share issue raises fears of shareholder dilution, of course. There's some justification for that here, as Avis's current outstanding share count is a bit over 35 million. Going forward, it'll be important for the stock's investors to keep a watchful eye on how those new funds are deployed. Read NextMar 27, 2026 •By Howard SmithWhy Avis Budget Group Stock Drove Higher This WeekMar 26, 2026 •By Eric VolkmanWhy Avis Budget Group Stock Zoomed Ahead TodayMar 30, 2026 •By David Jagielski, CPANike Stock Hasn't Been This Cheap Since 2017. Is It a No-Brainer Buy?Mar 30, 2026 •By Parkev Tatevosian, CFAShopify Stock Analysis: Buy or Sell?Mar 30, 2026 •By David Jagielski, CPADown Around 47% From Its High, Should You Buy Chewy Stock Right Now?Mar 30, 2026 •By Brett SchaferIs This the 1973 Oil Shock All Over Again? Here's How to Protect Your Portfolio.About the AuthorEric Volkman is a contributing Motley Fool finance and stock market analyst. Previously, Eric was an equities analyst at European investment bank Raiffeisen Capital and Investment. He’s also been a freelance finance writer since 1995. He studied at Susquehanna University.TMFVolkmanStocks MentionedAvis Budget GroupNASDAQ: CAR$135.56(-8.68%)-$12.89Bank of AmericaNYSE: BAC$47.21(+0.50%)+$0.24Morgan StanleyNYSE: MS$158.32(-0.04%)-$0.07*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.