X - Hawaiian Holdings: This Flight Could Potentially Crash
2024-06-23 02:27:55 ET
Summary
- Alaska Air Group's acquisition of Hawaiian Holdings presents a significant spread opportunity, but regulatory concerns may hinder the deal.
- Regulators are likely to move to block the deal, but this isn't the only problem the firm has.
- Hawaiian Holdings faces financial challenges, increasing debt, and regulatory hurdles, making it a risky investment with potential for significant downside.
Speculating on the outcome of mergers and acquisitions activities can be incredibly profitable. Much of the upside that comes with this comes from investing in a company before a deal is announced. This also is the stage of speculation that often carries the greatest uncertainty because there is no guarantee that a deal will be agreed upon. After a deal is announced, the difference between where shares of the company being acquired are trading at and the buyout price converge significantly. In many cases, this leaves little to no upside, besides a small gap that is essentially the time value of money and the probability that the deal will fall through....
Hawaiian Holdings: This Flight Could Potentially Crash