Jetblue shares soar as investor Icahn gets on board
Shares of Jetblue closed up more than 21% Tuesday as activist investor Carl Icahn took an almost 10% stake in the airline.
Icahn, who purchased the shares in January and February, said in a regulatory filing that he believes Jetblue’s stock is undervalued and represents an attractive investment opportunity. The stock has been down about 29% in the past year.
Icahn has had talks, and plans to continue talking, with Jetblue about possible representation on its board of directors.
“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,” Jetblue said in a statement.
Icahn became widely known as a corporate raider in the 1980s when he engineered a takeover of TWA, or Trans World Airlines. Icahn bought the airline in 1985, but by 1992 it filed for bankruptcy. TWA emerged from bankruptcy a year later but continued to operate at a loss. Its assets were sold to American Airlines in 2001.
Jetblue was dealt a major blow last month when a federal judge sided with the Biden administration and blocked Jetblue
Airways from buying Spirit Airlines, saying the $3.8 billion deal would reduce competition. Both airlines have filed their intention to appeal with a higher court, and a June hearing date has been set.
New York-based Jetblue had argued it needed the deal to grow quickly and better compete against bigger rivals that dominate the U.S. air-travel market. But shortly after the ruling, Jetblue told Spirit that it may terminate the deal.
Jetblue, the nation’s sixthlargest airline by revenue, now must come up with another growth plan. That will be an assignment for CEO Joanna Geraghty. She recently took over for Robin Hayes, who had engineered the deal.
Jetblue has struggled to recover from the COVID-19 pandemic while its bigger rivals have returned to healthy profitability. Jetblue has lost more than $2 billion since the start of 2020.