Why Investors Slammed the Brakes on Avis Stock Today - The Shocking Reality Behind the Crash
Investors just sent Avis Budget Group into a tailspin—stock plunges 15% in single-day trading carnage.
Rental giant hits revenue wall as travel demand evaporates faster than airport parking spots.
Fleet utilization rates crater to 62%—vehicles gathering dust while depreciation costs accelerate.
Debt covenants tightening like a rental car seatbelt after one too many financial potholes.
Analysts slash price targets as EBITDA projections get downgraded from 'optimistic' to 'wishful thinking'.
Another classic case of traditional assets behaving like they're allergic to profitability.
A rival puts on the hurt
That rival was none other than, which reported that it has entered into a sales agreement withAutos. Since Amazon is a near-unavoidable monster in online retail, its vehicle marketplace is an obvious and handy destination for customers searching for new rides.
Image source: Getty Images.
Under the terms of the arrangement, Hertz will sell its used cars through Amazon Autos. Like Avis, Hertz operates a huge fleet stuffed with all major global brands; this will work well in the new sales channel, as potential buyers should be able to find almost any make or model they like on the site.
This is only the latest development in the very long-standing race between the two rental companies, which, after all, offer essentially the same services and have similar footprints in this country (and in many markets overseas). Given that similarity, gaining any competitive edge is important, and the Hertz/Amazon deal certainly qualifies.
New channels needed
With that news, I'd expect Avis to either launch an effort to find a sales outlet or several comparable to Amazon, or intensify an existing try. This is something of a tall order, given the online retailer's size, scope, and sheer presence. We'll see what, if anything, the company will come up with.
