Shares of Spirit Airlines Inc. tumbled Friday after JetBlue Airways Corp. warned that the air carriers’ merger may need to be terminated.
JetBlue
JBLU,
disclosed in an 8-K filing with the Securities and Exchange Commission that it had informed Spirit
SAVE,
that “certain closing conditions” required by the merger deal “may not be satisfied” before the agreed-upon deadline.
As a result, JetBlue said “the merger agreement may be terminable on and after January 28, 2024.”
Spirit’s stock had plunged to a record low of $5.70 on Jan. 18 after a court ruling that blocked the carriers’ merger fueled concerns about Spirit’s viability if the merger isn’t completed. It bounced slightly after Spirit tried to reassure investors about its finances and after the companies appealed the court ruling.
On Friday, Spirit’s stock plunged 16.4% to nearly erase that bounce, while JetBlue shares gained 1.5%.
JetBlue said it continues to evaluate its options regarding the merger deal.
Over the past three months, Spirit shares have plummeted 62.3%, while JetBlue’s stock has soared 226.9%. In comparison, the U.S. Global Jets exchange-traded fund
JETS
has run up 29.3% and the S&P 500 index
SPX
has advanced 18.4%.
