Spirit Airlines: Waiting On JetBlue Money

Update - March 6

No surprise the government is looking to block the acquisition by JetBlue. The question is whether the DoJ actually has the right to block the merger. Besides, Spirit shareholders are likely better off without a deal. Regardless, the stock has fallen to the yearly and covid lows as the market apparently doesn't understand Spirit is better off without JetBlue. 

• Regulators are reportedly looking to block the prospective merger between JetBlue Airways (NASDAQ:JBLU) and Spirit Airlines (NYSE:SAVE), sending shares of the latter sliding.
• Both the Department of Transportation and Department of Justice are looking to halt the deal on the grounds that the merger would be anti-competitive, according to Bloomberg.
• Per prior media reports, executives from the carriers met with the DOJ in late February in a "last-rites" meeting to assuage regulatory concerns on the planned merger. That meeting followed reports earlier in February that the department was planning to file a suit as early as this month. Per the latest reports, the efforts to shift the DOJ’s stance on the deal were unsuccessful as a suit is indeed due to be filed as soon as Tuesday.

Original article posted on Feb. 9

Spirit Airlines expects to hear from the DOJ in the next month on whether the government organization will file to block the merger.

JetBlue Airways Corporation has started paying Spirit shareholders $0.10 a month to wait on the deal close.

Spirit Airlines stock is cheap based on closing the merger for $31 in cash or as a standalone airline with substantial EPS upside.

As the airline industry hits a boom phase, Spirit Airlines, Inc. (NYSE:SAVE) shareholders have to decide on whether to wait around for the JetBlue Airways Corporation (JBLU) merger cash. The biggest question remains whether the Department of Justice will file a lawsuit to block the deal. My investment thesis remains Bullish on the airline stock, as SAVE investors now collect $0.10 a month to wait on the deal close.

Read the full article on Seeking Alpha. 

Disclosure: Long SAVE. Please review the disclaimer page for more details.