1. Faruqi & Faruqi investigates securities claims against Avis Budget Group. 2. Avis reported a $1.96 billion loss linked to fleet strategy changes. 3. Misleading statements allegedly resulted in inflated business prospects for Avis. 4. CEO Joseph Ferraro will transition to Board Advisor; new CEO appointed. 5. Avis's stock dropped 6.82% following the disappointing financial results.
The significant financial losses and misleading statements will likely drive investor distrust. Historical cases, like Enron, show similar scenarios lead to long-term price declines.
The ongoing lawsuit and financial damages indicate significant risks for investors; critical legal outcomes will directly affect CAR's future.
The class action lawsuit and substantial financial impairment charges can lead to prolonged negative sentiment, affecting long-term stock stability. Similar issues in other companies often resulted in extensive recovery timelines.
NEW YORK--(BUSINESS WIRE)-- Faruqi & Faruqi, LLP, a leading national securities law firm, is investigating potential claims against Avis Budget Group, Inc. (“Avis” or the “Company”) (NASDAQ: CAR) and reminds investors of the June 24, 2025 deadline to seek the role of lead plaintiff in a federal securities class action that has been filed against the Company.
As detailed below, the complaint alleges that the Company and its executives violated federal securities laws by making false and/or misleading statements.
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Faruqi & Faruqi is a leading national securities law firm with offices in New York, Pennsylvania, California, and Georgia. The firm has recovered hundreds of millions of dollars for investors since its founding in 1995. See www.faruqilaw.com.
As detailed below, the complaint alleges that the Company and its executives violated federal securities laws by making false and/or misleading statements and/or failing to disclose that: (i) Avis Budget crafted and implemented a plan to significantly accelerate its fleet rotation in the fourth quarter of 2024; (ii) the foregoing acceleration shortened the useful life of the majority of the Company's vehicles in the Americas segment, thereby reducing their recoverable value; (iii) as a result, Avis Budget would be forced to recognize billions of dollars in impairment charges and incur substantial losses; (iv) all the foregoing was likely to, and did, have a significant negative impact on the Company's financial results; (v) accordingly, Avis Budget's financial and/or business prospects were overstated; and (vi) as a result, Defendants' public statements were materially false and misleading at all relevant times.
On February 11, 2025, Avis Budget issued a press release reporting its financial results for the fourth quarter and full year 2024. Among other items, Avis Budget reported a loss of $1.96 billion, or $55.66 per share, for the quarter, compared to a profit of $259 million, or $7.10 per share, for the same period in the prior year. Avis Budget attributed these results to "a change in strategy to significantly accelerate fleet rotations, which resulted in shortening the useful life of the majority of our vehicles in the Americas segment[,]" causing "a one-time non-cash impairment of $2.3 billion and other non-cash related charges of $180 million."
The press release also announced that the Company's Chief Executive Officer ("CEO"), Defendant Joseph A. Ferraro ("Ferraro"), "will transition from CEO to Board Advisor, effective June 30, 2025" and that "Brian Choi, the Company's Chief Transformation Officer, will take over as CEO, effective July 1, 2025."
On this news, Avis Budget's stock price fell $6.12 per share, or 6.82%, to close at $83.59 per share on February 11, 2025.
The court-appointed lead plaintiff is the investor with the largest financial interest in the relief sought by the class who is adequate and typical of class members who directs and oversees the litigation on behalf of the putative class. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member. Your ability to share in any recovery is not affected by the decision to serve as a lead plaintiff or not.
Faruqi & Faruqi, LLP also encourages anyone with information regarding Avis’ conduct to contact the firm, including whistleblowers, former employees, shareholders, and others.
To learn more about the Avis Budget Group class action, go to www.faruqilaw.com/CAR or call Faruqi & Faruqi partner Josh Wilson directly at 877-247-4292 or 212-983-9330 (Ext. 1310).
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