Icahn Enterprises purchase of JetBlue stock this week will have both short and long-term effects on the company's strategy. In the short term, his investment could bring increased scrutiny and pressure from shareholders for JetBlue to improve its financial performance and operational efficiency. This will prompt the company to focus on cost-cutting measures and optimizing routes to increase profitability. Additionally, Icahn's involvement may influence strategic decisions such as potential mergers or acquisitions to enhance shareholder value. Icahn was Trump's financial regulation advisor.

In the long term, JetBlue might undergo strategic shifts to align with Icahn's investment goals, potentially leading to changes in leadership, corporate governance, and overall business direction. The extent of these impacts will depend on Icahn's level of involvement, how many board seats he attains, and the responsiveness of JetBlue's management to his investment strategies. He is on the record saying, "I enjoy the hunt much more than the ‘good life’ after the victory" and "one of the hidden ‘assets’ in many companies is top management: get rid of them and the value goes up. What’s going on in companies these days is absurd. It’s like a corporate welfare state. We’re supporting managements who produce nothing."

 

Multiple board seats would indicate a larger than 10% stake, and approaching levels of control over the board. 11 members of the board currently. It will be interesting to see if he replaces certain board members or if they increase the size of the board to accommodate additional seats for him.

 

he can't force his way into a seat by buying shares can he?

 

Wouldn’t it be better if JetBlue was just sold to another airline with the business intact?

 

Why not just strip it of all its assets and then sell it. I thought this guy wasn't allowed near airlines after TWA? Nobody has answered that question.

 

I think that was Lorenzo.

 

He is allowed to buy airlines. You're thinking of Frank Lorenzo who was barred by the DOT from being involved in the US airline business.

Yes, he pretty much can. If you control a significant amount of voting shares you could put forth a shareholder proposal at the annual meeting to put Carl Icahn on the JB BOD. He has 34m shares and they would all vote in favor of that proposal. Even though Blackrock and Vanguard hold a lot of shares they usually dont vote in stuff like that. I own JBLU shares and have never voted in an annual meeting either.

Yes, assuming that JB was profitable and we had a different DOJ. I think Icahn's Plan A will be to shrink JB to profitability (or attempt to) and then sell us in a whole to either UA/AA/WN/AS after we get a new DOJ.

Plan B would be shrink us to profitability, and if we cant turn a profit and/or we dont get a new DOJ start parting out the airline. Sell BOS gates to WN, 20 JFK gates/slots to UA, 80 gates/slots to AA, the remaining to WN. Sell majority of FLL gates to UA and/or WN, sell MCO gates to F9 or UA. Sell newish A321 airframes to DL/UA, sell A220s to DL. This leaves JB with a roughly 100 A320 classics and a token number of gates in the NE/Florida at which point we announce a rebrand to become a single fleet ULCC and are either bought by some ULCC like Avelo/Frontier/Spirit or we declare BK and restructure to lower costs even further to be competitive as a ULCC on our own.

Hopefully this is all overly pessimistic and he enacts change to get us on a profitable path as a standalone and we grow in the future.

 

yeah I think that’s Frank Lorenzo? But yeah I agree Icahn and Lorenzo made a mess out of this industry for awhile.

 

Ichan took large stakes in EBay, Netflix, and Apple. None of which are out of business today.

he did make eBay sell off PayPal.

I could see, if the merger appeal were successful that after the operations were combined, saddle the spirit brand with debt and then bankrupt it. Who knows.


all of the stuff you mention decreases the book value of the company, which will hurt his investment.

 

Not that I am aware of.