Carl Icahn Discloses 9.9% Stake in JetBlue Airways, Citing Undervaluation and Attractive Investment Opportunity
Renowned activist investor Carl Icahn has revealed a significant 9.9% stake in JetBlue Airways, describing it as an undervalued and “attractive” investment opportunity. Icahn further disclosed that he is currently engaging in discussions with the company’s management and board regarding potential board representation. The disclosure was made in a filing submitted to the Securities and Exchange Commission on Monday.
According to the filing, Icahn has the option to increase his stake, dispose of it, engage in hedging strategies, or enter into a swap or other derivative transaction. However, the document emphasizes that he does not currently have any specific plans or proposals pertaining to the actions outlined in the filing.
Icahn and his affiliated funds currently own approximately 33.6 million shares of JetBlue. News of the stake acquisition led to a surge in the company’s stock, with shares jumping 17% during after-hours trading.
Responding to Icahn’s disclosure, a spokesperson for JetBlue stated that the company remains open to constructive dialogue with its investors, as it continues to execute its plan to enhance value for all shareholders and stakeholders.
It is worth noting that the shares were purchased by Icahn on multiple days between January 19 and February 12. Coinciding with Icahn’s investment, JetBlue recently witnessed a change in leadership. On Monday, Joanna Geraghty assumed the role of CEO, making her the first woman to oversee a major U.S. airline. Geraghty succeeded Robin Hayes and had previously served as the carrier’s president and chief operating officer.
Meanwhile, JetBlue’s planned acquisition of discount carrier Spirit Airlines, worth $3.8 billion, was recently blocked by a federal court judge. The decision is currently being appealed by the company. In an effort to improve its financial position, JetBlue has also been implementing cost-cutting measures with the aim of achieving savings of $200 million by the end of this year. Additionally, the airline has plans in place to introduce changes that are expected to boost revenue by $300 million.
Analyst comment
Positive news. Analysts predict that the market will react positively to Carl Icahn’s stake in JetBlue Airways, leading to an increase in the company’s stock. The open dialogue between Icahn and the company’s management could result in potential changes and improvements, benefiting the shareholders and stakeholders in the long run.
