Spirit Airlines Shares Plummet Following A Report Suggesting That The Company Is Exploring The Potential Of Filing For Bankruptcy

Benzinga

Spirit Airlines (NYSE: SAVE) experienced a significant drop of over 40% in pre-market trading on Friday. This decline follows reports of the airline engaging in bankruptcy talks with bondholders.

Transcript

00:00We got headlines yesterday. It just came after the close that the Spirit Airlines,

00:06considering bankruptcy filing coming from the Wall Street Journal, received a sell rating from

00:12TD Cohen yesterday morning before that. Either way, the stock was already trading down during

00:17the day. Then after hours, you get the news that they're filing for bankruptcy

00:21or considering filing for bankruptcy. Sorry, I don't want to-

00:24Not official yet.

00:25I don't want to be the one that people come back and say,

00:28you said it wrong. Considering filing for bankruptcy. I'm not sure. Obviously,

00:33the market reaction is telling you all you need to know. Down 34% this morning, 75 cents.

00:40It looks like Save is looking for a lifeline.

00:44Yeah. The DOJ didn't throw them a lifeline. They threw them a death sentence. We knew the merger

00:51between JetBlue and Save was a merger more out of necessity than trying to kill competition.

00:58But the DOJ, with their just killing all deals, now this blood, if Spirit goes down,

01:06this blood is on the DOJ's hands because they could have merged with JetBlue, cut some costs,

01:13save the airline. No, no, you can't merge. It's anti-competitive.

01:18Well, you know what's anti-competitive is actually allowing companies to go bankrupt.

01:23And this is on the DOJ 100%. We talked about this when they blocked the merger. I said,

01:30when they blocked the merger, that this is going to be tough for Spirit Air to survive.

01:34So here it is, what, eight months, 10 months later, and looking like they're teetering on

01:40bankruptcy now. Thank the DOJ for this. Thank the DOJ that you're going to have one less airline.

01:45You know who this is good for? All the other airlines because there's now less competition.

01:50Thank you, DOJ, LUV, trading higher. AAL, trading higher. Delta, trading higher. JetBlue

01:58themselves, trading up 4%. They were the ones that were going to acquire the merger. So,

02:04I mean, what obviously the DOJ was trying to do is keep one more airline there for more

02:10competition. And the exact opposite has occurred. So this blood on the DOJ hands,

02:16they're just the deal killers, man. They kill them all. This administration, this DOJ that

02:21they've got in there right now is the toughest one I've ever seen. They don't like stuff going

02:26through. I mean, the iRobot deal was ridiculous too. That's probably going to be the next one,

02:31you know, that they've killed off. So no, it's a rant, but I'm just, you know,

02:37writing was on the wall here. I don't know what they were thinking.

02:40It's a rumor, right? Nothing. I mean, it's in print, the streets reacting to it. At this point,

02:47I mean, since JetBlue already threw them a lifeline, I mean, I don't know what the possibilities are

02:52here. Yeah. Lifeline blocked, let them sink. That's what the DOJ said. Okay. You know,

03:01if you think this is a zero, which I have no way of telling, well, you can make a buck 49

03:08shorting it here. But if any kind of positive news comes out of this, then you're at risk.

03:13If you want to talk risk reward, you think there's a buck 49 on the board here. Well,

03:18if you want to risk up, you know, if you want to risk a buck 50 or two bucks, but it's just

03:24not something that's in my repertoire that, you know, to try and catch that extra buck 49.

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