Southwest Airlines Stock Up As Elliott Builds Around $1.9 Bln Stake

(RTTNews) - Southwest Airlines Co. (LUV) shares were gaining more than 6 percent on Monday morning trading, following a letter published by Elliott Investment Management about a nearly $1.9 billion stake in the airline.

In the letter, Elliot mentioned about the poor financial performance of the company due to outdated business software and monetization strategy, poor leadership, and lack of accountability.

The investment management fund also noted that Southwest Airlines's stock has dropped over 50 percent over the past three years, causing a decline in the value of employee-owned stock, and profit sharing.

To improve the company's performance, Elliot has recommended a 'Stronger Southwest' plan, under which it requires the Southwest Airlines to "enhance the board, upgrade leadership and undertake a comprehensive business review".

The activist firm stated that the plan could push Southwest's stock to $49 per share within a year, depicting a return of 77 percent over the period.

Currently, Southwest Airlines's stock is moving up 6.16 percent, to $29.47 over the previous close of $27.75 on the New York Stock Exchange.