JetBlue shares rise as activist investor Carl Icahn acquires stake
Date
2/13/2024 8:40:37 AM
(MENAFN) Ahead of Tuesday's market opening, JetBlue Airways saw a significant increase in its stock value by over 15 percent, attributed to activist investor Carl Icahn's acquisition of nearly a 10 percent stake in the airline. The move, disclosed through a regulatory filing, indicates Icahn's belief in the undervaluation of JetBlue's stock and his perception of it as an appealing investment opportunity. Notably, JetBlue's stock had experienced a downturn of approximately 29 percent over the past year.
Icahn's involvement extends beyond share acquisition; he has engaged in discussions with JetBlue and intends to pursue further dialogue regarding potential representation on the company's board of directors. Despite this development, JetBlue has yet to offer a response to inquiries seeking comment on Icahn's actions and intentions.
The airline faced a significant setback recently when a federal judge ruled in favor of the Biden administration's decision to block JetBlue's proposed acquisition of Spirit Airlines, citing concerns about reduced competition. Both JetBlue and Spirit Airlines have filed appeals with a higher court, with a hearing scheduled for June. JetBlue had asserted that the merger was essential for its rapid growth and enhanced competitiveness against larger industry players dominating the U.S. air travel market. However, following the court's decision, JetBlue indicated to Spirit Airlines the possibility of terminating the deal.
With the merger plan in limbo, JetBlue, headquartered in New York, must now strategize alternative avenues for growth. This task falls to CEO Joanna Geraghty, who recently succeeded Robin Hayes, the architect behind the failed acquisition. JetBlue's challenges extend beyond the regulatory setback, as the airline continues to grapple with the lingering impacts of the COVID-19 pandemic. Unlike its larger competitors, JetBlue has struggled to achieve profitability, facing losses exceeding USD2 billion since the onset of the pandemic in 2020. As the company navigates these complexities, its future growth trajectory remains subject to uncertainties and strategic decisions under Geraghty's leadership.
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