Activist Influence Sparks Market Momentum
Boarding1Now
It was after hours trading when Southwest Airlines (NYSE:LUV) experienced a remarkable 3.4% upsurge. This surge followed the high-profile activist investor Elliot Investment Management’s filing of a 13D document. This filing signaled not just Elliott’s stake in the airline but also a renewed push for transformative change within the company.
Elliott revealed a substantial 7% beneficial ownership in Southwest (LUV), a revelation detailed in a 13D filing. This disclosure unveiled Elliott’s possession of just under 42 million shares, a figure that has remained static since its initial disclosure in June.
The official declaration came subsequent to Elliott’s confirmation in June of a $2 billion stake in Southwest (LUV). At that time, the activist investor advocated for a comprehensive business review within the airline, holding firm to the belief that the airline’s stock could ascend to $49 per share. Within this context, Elliott made clear its demand for new leadership, calling out the company’s CEO Bob Jordan and Chairman Gary Kelly.
Reiterating its stance, Elliott, through the 13D filed on Monday, stood firm on its call for a revamped board, a new CEO, and an independent chair for the board.
Recent critiques from Elliott Management highlighted Southwest Airlines’ (LUV) “revenue-enhancing initiatives” as belated. These initiatives, aimed at doing away with open seating, were deemed by Elliott as inadequate given their tardiness, especially in light of a 50% dip in the airline’s share price over the past years.