The activist is seeking board changes and a new strategy
Share on email Elliott says it has built a $1.9 billion, or 11% economic interest in the airline, and with a stake that big, the aggressive hedge fund has a track record of getting what it wants.addressed to Southwest's board, Elliott said it's now one of the largest investors in the company.
Elliott's third demand is for Southwest to conduct a business review to modernize its operations, improve IT systems, and form a strategic plan to turn around the company's performance.Elliott, the largest and most aggressive activist investor in the world, is not calling for any major transaction or stock buybacks. The campaign is focused mainly on leadership and operations.
Elliott added a scathing, 51-page presentation to its Monday morning news rollout, listing dozens of areas where Southwest is falling short. It called out the company for its infamous 2022 system "meltdown" and noted the stock had lost half its value during the last three years.Southwest just held its annual meeting in May, meaning Elliott is preparing for a very long campaign, with board director nominations not due until early in 2025. For a May annual meeting, activists usually wait until at least the fall to launch an attack.
In addition, Southwest's slow response to the Elliott press release on Monday morning suggests the activist built its position quietly, and surprised the airline with its campaign.Southwest can fight Elliott, and defend Jordan and the board, or engage with the activist and somehow find common ground.Any peace agreement Southwest seeks with Elliott will presumably have to come with a leadership transition plan.
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Elliott takes $1.9 billion stake in Southwest Airlines and seeks to oust CEO and chairThe stake makes Elliott one of Southwest’s largest shareholders. Shares of Southwest were up 7% in premarket trading Monday.
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