As soon as Activist investor Carl Icahn reported a stake in JetBlue, the Airways shares jump 15%. Activist investor Carl Icahn on Monday reported a nearly 10% stake in JetBlue Airways, saying the airline stock is undervalued. JetBlue Airways shares spiked more than 15% in extended trading.
Activist investor Carl Icahn amassed the JetBlue Airways stock in a series of purchases in January and February, according to regulatory filings. He has had plans to continue discussions with the company “regarding the possibility of board representation,” the records said.
Carl Icahn buys JetBlue Airways stock
JetBlue said in a statement, “We are always open to constructive dialogue with our investors as we continue to execute our plan to enhance value for all of our shareholders and stakeholders.”
There was no update about the JetBlue stake from the representatives for Icahn.
Carl Icahn’s other investments
This is not Carl Icahn’s first investment involving the airline industry. In one of his more infamous activist campaigns, the corporate raider took TWA private in the late 1980s, only to see the airline struggle and file for bankruptcy.
Merger with Spirit Airlines
JetBlue has been cutting costs and working to improve operations in an effort to return to profitability after a post-Covid travel surge and a blocked merger with budget carrier Spirit Airlines. A federal judge last month ruled against a combination of the two airlines, citing reduced competition.
JetBlue had argued it needed the tie-up to help it compete against the largest American carriers. JetBlue and Spirit are appealing the judge’s ruling.
JetBlue’s shares
In the past 12 months, JetBlue’s stock is down more than 27% as of Monday’s close. The Long Island City, New York-based industrials company has a market cap of $2.06 billion. Shares of 65 target companies have advanced an average of 32% while the activist was involved. The NYSE Arca Airline Index, which tracks the broader sector, is up nearly 7% during the same period.
JetBlue’s new CEO, Joanna Geraghty, took the helm Monday, and the carrier has appointed a pair of airline veterans to get it back on track.
