Carl Icahn Is Betting Big on JetBlue (JBLU) Stock


  • Carl Icahn has bought nearly 10% of JetBlue (JBLU).
  • He says the airline is undervalued and wants a board seat.
  • Icahn started his career as a corporate raider with TWA.
JBLU stock - Carl Icahn Is Betting Big on JetBlue (JBLU) Stock

Source: Roman Tiraspolsky /

Investor Carl Icahn has taken a stake of nearly 10% in JetBlue (NASDAQ:JBLU).

Icahn, who runs Icahn Enterprises (NASDAQ:IEP), said the budget airline is undervalued. He will seek a board seat in discussions with directors. The airline has been cutting operating costs following its failed effort to merge with Spirit Airlines (NASDAQ:SAVE).

In response, JBLU stock rose 2% on Feb. 12 and another 14% overnight, adding over $300 million to its market capitalization. The stock opened this morning at $6.82 per share.

What Is Icahn’s Game?

Regulatory filings indicate Icahn made a series of purchases in January and February. The shares generally traded between $5-6 each during that period, meaning his stake cost $200-300 million. IEP has a market cap of just under $8 billion. The JetBlue-Spirit merger was scuttled by a court decision on Jan. 16, which briefly sent the stock below $5.

During the fourth quarter, JetBlue lost $104 million, 31 cents per share, on revenue of $2.3 billion. For the year, it lost $362 million, $1.12 per share, on revenue of $9.16 billion.

The current valuation is in line with that of American Airlines (NYSE:AAL). That airline is worth just about $9.75 billion on $53 billion in revenue and showed a profit last year.

This is Icahn’s first public activism since a report into IEP by Hindenburg Research last year. The report cut the value of IEP by half despite a dividend of $4/share that now yields 20.7%.

In some way, this is a return to Icahn’s roots. He first gained prominence in the 1980s by acquiring TWA. In 1991, Icahn sold TWA’s London routes to American, leaving him with a profit but TWA with a debt of $540 million. TWA was forced into Chapter 11 bankruptcy protection in 1992. 

JBLU Stock: What Happens Next?

Icahn has yet to discuss his plans. But investors are betting they’re good news for IEP, which was up 1.5% overnight.

As of this writing, Dana Blankenhorn 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 Publishing Guidelines.

Dana Blankenhorn has been a financial and technology journalist since 1978. He is the author of Technology’s Big Bang: Yesterday, Today and Tomorrow with Moore’s Law, available at the Amazon Kindle store. Tweet him at @danablankenhorn, connect with him on Mastodon or subscribe to his Substack.

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