The barbarians have come knocking at the gates for SWA

[arkflyr]

So this lowers the share price for all of us, so as to lessen the influence Elliott has? Is this right? I'm not smart about this shareholder stuff. Somebody explain it to me like I'm a guy who has spent 30+ years flying airplanes and not much else.

It is a defense mechanism that works several ways.

First if Elliott or anyone hits 12% ownership then all the other stockholders can purchase additional shares at 50% of the stock price which has the effect of diluting the Elliott or anyone’s position in a takeover bid.

It in turn can also be a way for the board to demand more per share in a takeover bid by threatening its use. This covers the board’s fiduciary responsibility to the rest of the shareholders to get maximum amount per share in a takeover bid.

Sometimes they work and sometimes they don’t, Twitter for instance adopted one when Musk started buying up shares but later didn’t use it since he so wildly overpaid for the company.

That’s the cliff’s notes of the thing as I see it. There is probably things I missed and better ways to explain it than that. I’m only on my second cup of coffee.

To me I think GK and BJ are going to circle the wagons and fight this out. I’m really curious to listen to the investor call later this month.

 

[Minuteman]

“Oh no, a so-called ‘activist investor’ has purchased a significant number of shares and is now demanding we ‘get those numbers up’!”

“Perhaps, rather than responding to the orderly demands of being a publicly-traded company, we circle-up our jerks and hide behind all the investors with a poison pill to protect our club of Not-Herbs!”

It’s not like Elliott wants to do a leveraged buy-out on LUV and this is a last-ditch defense. They want they people doing a historically mediocre job to be replaced, and those peoples’ response was to threaten the stock valuation.