Hostile Takeover Bid Sends Spirit Airlines Stock Soaring

Short sellers are hitting the exits in droves

Digital Content Manager
May 16, 2022 at 10:29 AM
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The shares of Spirit Airlines Incorporated (NYSE:SAVE) are up 12.7% at $19.13 this morning, after JetBlue Airways (JBLU) launched an all-cash, hostile takeover bid for the low-cost airline, following the rejection of its $33 per share buyout proposal. JetBlue is now offering $30 per share to shareholders, though it said it is willing to pay its original offer, pending "necessary diligence."

The security has been extremely volatile of late. SAVE's early April bull gap lost steam at the $28 area, which also rejected its February rally. The shares are now bouncing off a May 12, annual low of $15.94, though the 20-day moving average still lingers above as resistance. Longer term, Spirit Airlines stock has shed 51.4% in the last 12 months.

Short sellers have been hitting the exits in droves. In fact, short interest fell 15.1% in the last reporting period, though the 8.64 million shares sold short still make up 8% of SAVE's available float.  

Options traders are blasting the equity in response to today's news. Just in the first half hour of trading, 7,412 calls and 972 puts have exchanged hands, which is 13 times the volume that is normally seen at this point. Most popular are the May 17.50 call, where positions are currently being opened, and the 25 call in the same monthly series.


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