The pain isn’t over yet for Spirit Airlines (NYSE:SAVE), as shares of the ultra-low-cost carrier are down more than 20% today. Yesterday, U.S. District Court Judge William Young ruled to block Spirit’s proposed merger with JetBlue Airways (NASDAQ:JBLU), citing reduced competition fears and higher ticket fares for Spirit customers. JetBlue had agreed to buyout Spirit for $3.8 billion in July 2022 after Spirit’s negotiations with Frontier (NASDAQ:ULCC) fell through.
“JetBlue plans to convert Spirit’s planes to the JetBlue layout and charge JetBlue’s higher average fares to its customers,” wrote Young. “The elimination of Spirit would harm cost-conscious travelers who rely on Spirit’s low fares.”
In response, the two companies reiterated their view that a merger would in fact increase competition through lower fares. The two companies are currently in the process of reviewing the decision in order to create a game plan for their next steps. An approval of the merger would have made the combined company the fifth-largest airline in the United States.
5 Investors Betting Big on SAVE Stock
Tracking institutional ownership is important, as these large investors provide liquidity and support for stocks. During the third quarter, 210 13F filers disclosed a stake in SAVE stock, a decline of six filers from the prior quarter. Total shares owned by these filers remained steady at 71.88 million compared to 71.19 million as of the second quarter. Five of these filers owned SAVE in their top 10 positions.
Hedge funds, whose data is included in 13F data, were more bullish. Total hedge fund ownership was 24.61 million shares as of Q3, up by 7.01% quarter-over-quarter (QOQ). These hedge funds may have increased their stakes in order to take advantage of the merger arbitrage opportunity.
With that in mind, let’s take a look at Spirit Airlines’ top five shareholders:
- Vanguard: 10.35 million shares. Vanguard acquired 34,883 shares during Q3.
- BlackRock (NYSE:BLK): 7.87 million shares. BlackRock sold 47,480 shares during Q3.
- FMR: 5.29 million shares. FMR acquired 67,977 shares during Q3.
- Cyrus Capital Partners: 3.12 million shares. Cyrus’ stake remained unchanged during Q3.
- Dimensional Fund Advisors: 2.77 million shares. Dimensional sold 306,038 shares during Q3.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
