Spirit Airlines (NYSE: SAVE) experienced a significant drop of over 40% in pre-market trading on Friday. This decline follows reports of the airline engaging in bankruptcy talks with bondholders.
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00:00We got headlines yesterday. It just came after the close that the Spirit Airlines,
00:06considering bankruptcy filing coming from the Wall Street Journal, received a sell rating from
00:12TD Cohen yesterday morning before that. Either way, the stock was already trading down during
00:17the day. Then after hours, you get the news that they're filing for bankruptcy
00:21or considering filing for bankruptcy. Sorry, I don't want to-
00:24Not official yet.
00:25I don't want to be the one that people come back and say,
00:28you said it wrong. Considering filing for bankruptcy. I'm not sure. Obviously,
00:33the market reaction is telling you all you need to know. Down 34% this morning, 75 cents.
00:40It looks like Save is looking for a lifeline.
00:44Yeah. The DOJ didn't throw them a lifeline. They threw them a death sentence. We knew the merger
00:51between JetBlue and Save was a merger more out of necessity than trying to kill competition.
00:58But the DOJ, with their just killing all deals, now this blood, if Spirit goes down,
01:06this blood is on the DOJ's hands because they could have merged with JetBlue, cut some costs,
01:13save the airline. No, no, you can't merge. It's anti-competitive.
01:18Well, you know what's anti-competitive is actually allowing companies to go bankrupt.
01:23And this is on the DOJ 100%. We talked about this when they blocked the merger. I said,
01:30when they blocked the merger, that this is going to be tough for Spirit Air to survive.
01:34So here it is, what, eight months, 10 months later, and looking like they're teetering on
01:40bankruptcy now. Thank the DOJ for this. Thank the DOJ that you're going to have one less airline.
01:45You know who this is good for? All the other airlines because there's now less competition.
01:50Thank you, DOJ, LUV, trading higher. AAL, trading higher. Delta, trading higher. JetBlue
01:58themselves, trading up 4%. They were the ones that were going to acquire the merger. So,
02:04I mean, what obviously the DOJ was trying to do is keep one more airline there for more
02:10competition. And the exact opposite has occurred. So this blood on the DOJ hands,
02:16they're just the deal killers, man. They kill them all. This administration, this DOJ that
02:21they've got in there right now is the toughest one I've ever seen. They don't like stuff going
02:26through. I mean, the iRobot deal was ridiculous too. That's probably going to be the next one,
02:31you know, that they've killed off. So no, it's a rant, but I'm just, you know,
02:37writing was on the wall here. I don't know what they were thinking.
02:40It's a rumor, right? Nothing. I mean, it's in print, the streets reacting to it. At this point,
02:47I mean, since JetBlue already threw them a lifeline, I mean, I don't know what the possibilities are
02:52here. Yeah. Lifeline blocked, let them sink. That's what the DOJ said. Okay. You know,
03:01if you think this is a zero, which I have no way of telling, well, you can make a buck 49
03:08shorting it here. But if any kind of positive news comes out of this, then you're at risk.
03:13If you want to talk risk reward, you think there's a buck 49 on the board here. Well,
03:18if you want to risk up, you know, if you want to risk a buck 50 or two bucks, but it's just
03:24not something that's in my repertoire that, you know, to try and catch that extra buck 49.