Spirit Aviation Holdings stock, the parent of troubled Spirit Airlines, plummeted as the airline operator faces cash shortages and the possibility of going out of business due to market challenges and weak demand. Initiatives to improve finances may not be enough, leading to doubts about its future. Stock fell 40%. Other major operators surged.
Following a failed takeover by JetBlue Airlines and rejected merger attempts with Frontier, Spirit emerged from financial restructuring facing $795 million in debt, $350 million in new equity, and a $275 million credit line. The company’s liquidity requirements and operational improvement needs are pressing due to debt obligations and credit processing agreements.
New CEO Dave Davis is implementing strategies to appeal to high-spending travelers, update programs, and establish partnerships to boost demand. However, the company posted revenue of $1.02 billion, a net loss of $245.83 million, and a loss per share of $7.24 in the last quarter. Excess capacity remains a challenge in the industry, with Delta’s CEO emphasizing the importance of premium services for airlines to thrive. 1. The stock market experienced a significant drop today, with the Dow Jones Industrial Average falling 500 points. This decline was attributed to concerns about rising inflation and the potential for interest rate hikes by the Federal Reserve.
2. The CDC announced that fully vaccinated individuals can now go without masks in most indoor and outdoor settings. This decision comes as COVID-19 cases continue to decline and vaccination rates increase across the country.
3. Tesla CEO Elon Musk announced plans to accept Bitcoin as payment for Tesla vehicles once again. This decision comes after Musk suspended Bitcoin payments earlier this year due to environmental concerns about the cryptocurrency’s energy consumption.
4. The United States and the European Union reached a deal to end a 17-year dispute over aircraft subsidies. This agreement will suspend billions of dollars in tariffs on goods like wine, cheese, and airplanes, providing a boost to transatlantic trade relations.
5. Amazon announced that it will acquire MGM Studios for $8.45 billion, marking its largest acquisition since buying Whole Foods in 2017. This deal will give Amazon access to MGM’s vast library of content, including popular franchises like James Bond and Rocky.
Read more at Yahoo Finance: Spirit Airlines stock craters on warning it could go out of business