JetBlue Airways rallied early Tuesday on news that activist investor Carl Icahn held a nearly 10% stake in the company. In addition, JetBlue's new chief executive took the helm Monday in a history-making move. JetBlue shares had climbed 80% from a November low through Monday's close, but remained more than 72% below an April 2021 high.
A regulatory filing from Icahn's Icahn Enterprises revealed it held a 9.9% stake in the budget air carrier. The statement said, "The reporting persons acquired their positions in the shares of common stock in the belief that they were undervalued and represented an attractive investment opportunity. The reporting persons have had, and intend to continue to have, discussions with members of the Issuer's management and board of directors regarding the possibility of board representation."
Carl Ichan Says JetBlue Undervalued
The upshot is that Icahn sees JetBlue as undervalued and investment that is attractive, but which suffers from some deficiencies in management. Icahn released the note the same day that longtime JetBlue executive Joanna Geraghty took over the chief executive's post from outgoing CEO Robin Hayes.
JetBlue had announced Geraghty's appointment, reportedly marking the first woman to rise to the chief executive's seat in a major U.S. airline, on Jan. 8.
The JetBlue/Icahn news also follows a the blocking by a federal judge of JetBlue's attempted $3.8 billion takeover of rival Spirit Airlines. The two airlines had jointly appealed that Jan. 16 decision. A week later, on Jan. 26, JetBlue said the agreement allowed it to exit the merger if certain conditions were not met.
Reuters reported on Tuesday that some Spirit Airlines pilots had sent resumes to other airlines, ostensibly in search of a more stable situation. A Spirit spokesperson has said the levels are not out of the ordinary and pilot resignations are below its forecast for 2024, Reuters said.
Airlines, JetBlue stock
JetBlue rallied 16% early Tuesday, a move that would lift shares back above 7 — their highest level since August. Spirit Air added 0.2%.
Larger airline stocks showed no notable impact, with Delta Air Lines, United Airlines Holdings and American Airlines Group tightly mixed in premarket trade. Southwest Airlines dipped 1%.
Smaller carriers, including Allegiant, SkyWest and Hawaiian Holdings, we unchanged ahead of the open.
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