JetBlue Airways Corp.'s shares gained about 16 percent in the extended trading on Monday on Nasdaq after activist investor Carl Icahn reported around 10 percent stake in the airline.
In a filing with the U.S. Securities And Exchange Commission, Icahn reported owning 33.62 million shares, representing 9.91 percent stake. JetBlue had around 339.28 million shares of Common Stock outstanding as of January 31, 2024.
Icahn companies bought JetBlue shares in open market purchases for an aggregate purchase price of around $119.75 million.
According to the billionaire investor, the shares were acquired in the belief that they were undervalued and represented an attractive investment opportunity. The Reporting Persons have had, and intend to continue to have, discussions with members of the Issuer's management and board of directors regarding the possibility of board representation, the filing noted.
The news comes as JetBlue is facing weakness in its performance in the new year. In late January, while reporting a fourth-quarter net loss compared to prior year's profit, the company said it sees lower revenues and capacity in its first quarter and fiscal 2024.
For the first quarter, the company anticipates revenue to decline 5 percent - 9 percent year-over-year, and capacity, measured in Available Seat Miles, to decline 3 percent to 6 percent from last year. For fiscal 2024, the company targets revenue to be approximately flat, and capacity to be down low single digits.
Ursula Hurley, JetBlue's chief financial officer, then said the company was carefully evaluating deeper cuts to its controllable costs beyond its ongoing fleet modernization and structural cost programs.
In its fourth quarter, net loss was $104 million, compared to profit of $24 million, and operating revenue was $2.3 billion, down 3.7 percent year-over-year, while capacity increased 3.3 percent.
Last week, the Federal Aviation Administration or FAA announced that JetBlue's two planes clipped one another at Boston Logan International Airport, while no injuries were reported by passengers or crew members.
In recent developments, the U.S. District Court for the District of Massachusetts in mid January blocked JetBlue's proposed $3.8 billion acquisition of Spirit Airlines Inc., citing competition concerns. It was in July 2022 that JetBlue agreed to acquire Spirit Airlines for an equity value of $3.8 billion. In late January, the company informed Spirit that the merger agreement may be terminable on and after January 28 as certain conditions may not be satisfied.
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