A hedge fund sold shares in car rental company Avis after the stock skyrocketed this spring. This prompted the company to sue its major owner – who is now forced to pay over 6 billion kronor to the company, writes Financial Times.
Avis reached a settlement with hedge fund Pentwater Capital on Monday after the car rental group accused the investor of improperly making large profits from sharp fluctuations in the company's share price earlier this spring.
The stock rose by over 300 percent over three weeks in April before plummeting by 38 percent in a single day. During the report presentation that month, Avis CEO Brian Choi accused its major owner of having contributed to the price drop.
The company already promised at the time to "aggressively recover" any improper profits, citing a US securities law that prevents large shareholders from quickly making profits on stock transactions.
It is not known how much Pentwater Capital made from the sale, but as part of the settlement, the hedge fund will pay $650 million, equivalent to 2.6 billion kronor, to Avis. Avis shares rose about 7 percent in U.S. after-hours trading on Monday.
Source: DI.SE
