Spirit Airlines Inc. (SAVE) shares took a tumble on Tuesday, dropping 7.78% to $2.07. This decline likely reflects profit-taking after Monday’s rally, where the stock surged on news of the company’s extended debt refinancing deadline. The airline announced it had modified its card processing agreement, pushing back the deadlines for its 2025 notes. The original maturity date of December 31st was extended to March 3rd, while the deadline for the 2025 notes moved from October 21st to December 23rd. This extension comes after ongoing negotiations with U.S. National Bank Association regarding Visa and MasterCard payments.
Spirit Airlines has been battling a storm of financial challenges. The airline has seen its stock value plummet over 90% in the past year, with bankruptcy speculation swirling. Despite utilizing its $300 million credit facility, the airline expects to end the year with over $1 billion in liquidity. The airline has grappled with losses in almost every quarter since February 2020, a consequence of the pandemic’s impact on the travel industry. The path forward remains uncertain, further complicated by a federal judge’s decision to block the proposed merger with JetBlue Airways.
Adding to these woes are issues with grounded planes due to Pratt & Whitney engine problems. Despite the setbacks, Spirit is making moves to streamline its operations. The airline has shifted its market strategy, exiting 42 markets while adding 77 new routes, aiming to better align its offerings with current demand. Spirit also expects to achieve $100 million in annual cost savings by 2024, a positive sign for the airline’s future.
How to Invest in SAVE Stock
For those interested in investing in Spirit Airlines, the process involves purchasing shares through a brokerage account. A list of trading platforms can be found here, many of which allow fractional share purchases. This option enables investors to own portions of a stock without buying an entire share, a particularly useful feature for expensive stocks like Berkshire Hathaway.
For those looking to bet against the company, the process is more complex. It requires access to an options trading platform or a broker willing to facilitate short-selling. Shorting a stock involves borrowing shares and selling them, with the hope of buying them back at a lower price later. However, short-selling is a risky strategy and should only be undertaken by experienced investors.
Another way to bet against Spirit Airlines is through options trading. Investors can purchase put options or sell call options at a strike price above the current trading price. Both options offer the potential to profit from a decline in the share price.
Key Data Points:
* SAVE has a 52-week high of $17.49 and a 52-week low of $1.40.
It’s important to note that this information is for educational purposes only and does not constitute investment advice. It is crucial to conduct thorough research and consult with a qualified financial advisor before making any investment decisions.