In a significant development, activist investor Carl Icahn has acquired an almost 10% stake in JetBlue, propelling the airline’s shares up by more than 18% in Tuesday afternoon trading. Icahn, who made the purchases in January and February, expressed his belief in a regulatory filing that JetBlue’s stock is undervalued and presents an appealing investment opportunity. Despite a 29% decline in the past year, Icahn aims to engage in ongoing discussions with JetBlue, exploring potential representation on its board of directors.
JetBlue responded in a statement, stating, “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.”
Known for his corporate raiding tactics since the 1980s, Icahn engineered a take-over of TWA (Trans World Airlines) in 1985, which eventually led to bankruptcy in 1992. JetBlue, facing a setback last month when a federal judge blocked its acquisition of Spirit Airlines, is now grappling with the aftermath. The UD$3.8 billion deal was deemed to reduce competition and both airlines have filed appeals set for a June hearing.
With CEO Joanna Geraghty taking the reins from Robin Hayes, who orchestrated the thwarted deal, JetBlue, as the nation’s sixth-largest airline by revenue, is now tasked with devising an alternative growth strategy in the highly competitive U.S. air-travel market.
