Elliott Investment Management Informs Southwest Airlines About Special Shareholders’ Meeting: Retail Remains Bearish

Activist investor Elliott Investment Management’s special shareholder meeting for Southwest Airlines (LUV) has finally materialized. On Monday, Elliott said it has informed the airline that it is calling for the special meeting with its shareholders and has requested for the meeting to take place on Dec. 10.

Elliott has submitted a proposal to elect eight director candidates to Southwest's Board that include names like former Ryanair deputy CEO Michael Cawley, former Virgin America CEO David Cush, former head of the Federal Railroad Administration Sarah Feinberg, among others. At the same time. the activist investor has also submitted a proposal for the removal of eight current Southwest directors.

Elliott's Partner John Pike and Portfolio Manager Bobby Xu said in a statement that the nominees put forward are uniquely qualified to hold the company's executive leadership accountable and ensure that the firm delivers improved results.

"Southwest's shareholders cannot afford to see – yet again – today's new initiatives turn into tomorrow's broken promises," they said.

Following the release of the report, Shares of Southwest Airlines were trading 0.44% higher on Monday morning while retail sentiment on Stocktwits continued to trend in the ‘bearish’ territory (43/100).

In September, Elliott had announced in an open letter to Southwest shareholders that it intends to call for a special meeting “given the urgent need for leadership change.”

Elliott had alleged that Southwest's management and board have chosen a go-it-alone path with the goal of obstructing a leadership change that is urgently needed.

The activist investor, which owns about 11% in the airline, had highlighted that although executive chairman Gary Kelly intended to resign, it will not happen until next May.

The activist investor had categorically stated it does not support Southwest Airlines’ current course, which it believes is being charted in a haphazard manner by a group of executives “in full self-preservation mode.”

The airline was also in the news recently after board member and Interglobe Aviation co-founder Rakesh Gangwal bought a significant quantity of LUV shares. According to multiple exchange filings, Gangwal bought over 3.6 million shares of the airline at an approximate price of $29 per share. Executive chairman of the board, Gary Kelly, too bought shares of the firm.

Shares of Southwest Airlines have risen over 8% since the beginning of the year.

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