Misery loves company, and it seems that both activist investor Carl Icahn and JetBlue are in need of some companionship. After facing significant stock price declines, Icahn Enterprises has disclosed a 9.9% ownership stake in the airline, signaling a potential partnership between the two entities.
Icahn Enterprises’ decision to invest in JetBlue comes after a tumultuous period for both parties. Icahn Enterprises has seen its shares plummet by 72.2% over the past five years, while JetBlue’s stock has experienced a 66% decline during the same period. The airline’s woes were further compounded by a judge’s ruling that blocked a proposed $3.8 billion merger with Spirit Airlines.
However, Icahn sees potential in JetBlue, believing that the stock is undervalued and represents an attractive investment opportunity. In a filing, Icahn Enterprises revealed that it has engaged in discussions with board members and executives about securing a seat on JetBlue’s board. The firm continues to hold talks with the airline, indicating its interest in playing an active role in shaping the company’s future.
JetBlue, for its part, has welcomed Icahn’s overtures. In a statement, the company expressed its openness to constructive dialogue with investors as it strives to enhance value for all shareholders and stakeholders. However, the timing of Icahn’s involvement may not be ideal, as JetBlue’s new CEO, Joanna Geraghty, officially assumed her role on the same day as the disclosure. Geraghty, who previously served as president and chief operating officer, will now lead the airline through these challenging times.
JetBlue’s board, chaired by Peter Boneparth, will also have to navigate the dynamics of dealing with Icahn. Boneparth, a former senior advisor to The Blackstone Group and private equity firm Irving Capital Partners, is no stranger to such situations. He also chairs the board of Kohl’s, which faced off with activist investors in 2021.
In addition to the JetBlue investment, Icahn Enterprises made headlines on the same day with an agreement reached with utility company American Electric Power (AEP). The agreement will see two new directors appointed to AEP’s board, including Icahn Enterprises senior managing director Hunter Gary. This move further solidifies Icahn’s influence in the corporate world.
As both Icahn Enterprises and JetBlue navigate their respective challenges, it remains to be seen how their partnership will unfold. With Icahn’s expertise and influence, coupled with JetBlue’s determination to enhance shareholder value, the stage is set for an interesting journey ahead. Only time will tell if this collaboration will prove to be a turning point for both parties or simply another chapter in their ongoing struggles.