FX.co ★ Southwest Airlines Stock Up As Elliott Builds Around $1.9 Bln Stake

On Monday morning, shares of Southwest Airlines Co. (LUV) were up by over 6% after Elliott Investment Management disclosed a substantial $1.9 billion investment in the airline.

In an open letter, Elliott highlighted the airline’s subpar financial performance, attributing it to outdated business software, a flawed monetization strategy, ineffective leadership, and a lack of accountability.

The investment management firm pointed out that Southwest Airlines' stock has plummeted by more than 50% over the past three years, adversely impacting the value of employee-owned stock and profit-sharing.

To rectify the company’s performance issues, Elliott proposed a 'Stronger Southwest' plan. This strategy calls for enhancements to the board, upgrades in leadership, and a comprehensive business review.

According to Elliott, implementing this plan could boost Southwest's stock to $49 per share within a year, representing a 77% return.

As of the latest trading session, Southwest Airlines' stock has risen by 6.16%, reaching $29.47, up from the previous closing price of $27.75 on the New York Stock Exchange.