SAVE - Why Spirit Airlines Stock Soared on Wednesday
2023-03-08 18:19:15 ET
The latest development in the saga that is the proposed acquisition of Spirit Airlines (NYSE: SAVE) by peer JetBlue Airways (NASDAQ: JBLU) gave the former company's investors hope on Wednesday. Specifically, this was the reassignment of a government lawsuit on the deal to a new judge. The market reacted by bidding Spirit's stock up a chunky 4.5% on the day.
The lawsuit, which has been filed by the Justice Department on antitrust grounds, will be presided over by U.S. District Judge William Young in Boston. What's encouraging for Spirit investors is that Young has a reputation for speeding lawsuits to trial. This promises a relatively fast resolution to the matter, as opposed to a tough, dragged-out, and exhausting legal fight.
On Tuesday, Justice, together with the states of Massachusetts and New York, plus the District of Columbia, filed its antitrust lawsuit. It alleges, "By eliminating that competition and further consolidating the United States airlines industry, the proposed transaction will increase fares and reduce choice on routes across the country, raising costs for the flying public and harming cost-conscious fliers most acutely."
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Why Spirit Airlines Stock Soared on Wednesday