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Misery loves the company and after facing sharp share price declines of more than 50% each, activist investor Carl Icahn and JetBlue might need each other right now.
Icahn Enterprises revealed 9.9% ownership interest at airline JetBlue today, Icahn’s first foray back to the dance floor after promising that the company would “stick to our fabric” after short seller Hindenburg Research published a scathing critique of the company last year . Icahn Enterprises shares are down about 72.2% over the past five years and more than 60% since the Hindenburg report.
Meanwhile, JetBlue has been licking its wounds since a judge’s ruling blocked an estimated $3.8 billion merger with Spirit Airlines. JetBlue shares are down 66% over the past five years, but rose about 16% after Icahn disclosed his stake in the airline today.
Icahn revealed in today’s filing that the company acquired JetBlue shares because it believes they are “undervalued and represent an attractive investment opportunity.” Icahn Enterprises has had discussions with board members and executives about seeking a seat on JetBlue’s board of directors and continues to have discussions with the airline, according to the filing.
In a statement, JetBlue said it welcomes Icahn’s proposals.
“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,” the company said in an email.
However, the timing for JetBlue may not be ideal given that the company’s new CEO, Joanna Geraghty, officially took the helm today. Geraghty has been president and chief operating officer since 2018 and previously served as executive vice president and chief people officer. Chief Operating Officer Warren Christie also officially started today, after serving as head of safety, security and fleet operations.
Geraghty replaced outgoing chief executive Robin Hayes, who had held the position since February 2015. Hayes will remain on the 10-person board, which is chaired by Peter Boneparth. Dealing with Icahn might be old hat for him. Boneparth is a former senior advisor to a division of investment management firm The Blackstone Group and a former advisor to private equity firm Irving Capital Partners. He also chairs the board of Kohl’s, which faced off against a group of activists in 2021.
It was also an eventful Monday for Icahn Enterprises.
American Electric Power Utility Company Announced today that it had reached a nomination and appointment agreement with Icahn funds to appoint two new directors to the board. Hunter Gary, senior managing director of Icahn Enterprises, joined AEP’s board of directors along with Henry Linginfelter, former executive vice president of Southern Company Gas. Gary’s appointment is subject to regulatory approvals and he will have no voting rights until the company obtains them.