Connect with us

Business

An Investment Firm Has Taken A $1.9 Billion Stake In Southwest Airlines And Wants To Oust The CEO

Published

on

southwest

DALLAS — Elliott Investment Management, an activist shareholder, has purchased a $1.9 billion investment in Southwest Airlines and is aiming to drive out the airline’s CEO, who has suffered with operational and financial issues.

The airline’s shares climbed 7% on Monday, their second-best day since 2020.

In a letter to Southwest’s board, the investment firm expressed concern that the company’s stock price had declined by more than 50% in the previous three years.

southwest

southwest | AP News Image

An Investment Firm Has Taken A $1.9 Billion Stake In Southwest Airlines And Wants To Oust The CEO

Elliott claimed that Southwest had failed to modernize, limiting its capacity to compete with other carriers. The business attributed the Dallas-based carrier’s huge flight cancellations in December 2022 to what it described as obsolete software and operational methods.

“Poor execution and leadership’s stubborn refusal to evolve the Company’s strategy have resulted in deeply disappointing results for shareholders, employees, and customers alike,” the investment group wrote in a Monday letter.

Southwest CEO Robert Jordan “has delivered unacceptable financial and operational performance quarter after quarter,” according to the letter. The letter also stated that Jordan and former CEO Gary Kelly, now the airline’s executive chairman, “are not up to the task of modernizing Southwest.”

Elliott is calling for outside executives to replace Jordan and Kelly and for “significant” board changes, including new independent directors with expertise at other airlines.

Southwest said Elliott contacted it on Sunday and looks forward to “better understanding their perspectives on our company.”

“The Southwest Board of Directors is confident in our CEO and management’s ability to execute against the company’s strategic plan to drive long-term value for all shareholders, safely and reliably serve our customers and deliver on our commitments to all of our stakeholders,” said a spokesperson in a statement.

Southwest has long appealed to budget-conscious travelers by not charging fees for checked baggage or reservation changes. Its airplanes do not feature a premium cabin. During the epidemic, its nearest competitors reduced change fees, and they are winning over upscale tourists with superior seats and services.

southwest

Southwest | AP News Image

An Investment Firm Has Taken A $1.9 Billion Stake In Southwest Airlines And Wants To Oust The CEO

When Southwest announced a $231 million first-quarter deficit in April, Jordan appeared to give in to market pressure by saying that the airline was mulling adjustments to its boarding and seating regulations. The airline even took the unusual step of removing four cities from its map.

Savanthi Syth, an airline analyst at Raymond James Financial, believes Elliott was drawn to Southwest because of its well-known brand, dominant position at several airports, and robust finance sheet, among other factors. She stated that the necessary improvements should not be difficult to implement.

Southwest expanded aggressively following the pandemic, providing service to 18 more locations. Syth stated that Southwest had understood the need to slow growth, although six or eight months too late, resulting in increased expenses.

The airline has little alternative but to reduce its growth: it won’t be able to receive all of the jets it bought due to Boeing manufacturing cuts after a door plug broke out of a 737 Max during an Alaska Airlines flight in January.

Southwest carries the most passengers within the United States, while Delta, United, and American — all of which have more extensive overseas routes — generate far more income. Southwest had been profitable for 47 consecutive years, an unrivaled record in the airline industry, until the coronavirus pandemic struck in 2020.

southwest

Southwest | Skift Image

An Investment Firm Has Taken A $1.9 Billion Stake In Southwest Airlines And Wants To Oust The CEO

Southwest recorded a record $26.1 billion in revenue last year, but its $465 million profit was lower than the previous two years and approximately one-tenth of Delta’s profit.

Delta and United have emerged as the most profitable US airlines following the pandemic, as evidenced by their respective stock performance. Southwest shares were down 52% from three years ago at the closing of trade Friday, roughly in line with American. However, Delta shares increased by more than 9% throughout that period, while United shares decreased by only about 7%.

The Wall Street Journal was the first to expose Elliott’s interest in Southwest.

SOURCE – (AP)

Kiara Grace is a staff writer at VORNews, a reputable online publication. Her writing focuses on technology trends, particularly in the realm of consumer electronics and software. With a keen eye for detail and a knack for breaking down complex topics, Kiara delivers insightful analyses that resonate with tech enthusiasts and casual readers alike. Her articles strike a balance between in-depth coverage and accessibility, making them a go-to resource for anyone seeking to stay informed about the latest innovations shaping our digital world.

Continue Reading

Business

Supreme Court, Siding With Starbucks, Makes It Harder For NLRB To Win Court Orders In Labor Disputes

Published

on

starbucks
Starbucks | PixaBay Image

Washington: In a decision sparked by a labor dispute with Starbucks, the Supreme Court on Thursday made it more difficult for the federal government to obtain court orders when it suspected a corporation of meddling in unionization efforts.

The justices raised the bar on when a federal court may require worker jobs to be protected during a union organizing drive.

A higher standard, pushed by Starbucks that must be satisfied in most other disputes over court orders or injunctions, was favored by the court unanimously over a provision that some courts had applied to orders requested by the National Labour Relations Board.

starbucks

Starbucks | PixaBay Image

Supreme Court, Siding With Starbucks, Makes It Harder For NLRB To Win Court Orders In Labor Disputes

The National Labour Relations Act, which controls the agency, has, the NLRB had contended, permitted judges to issue temporary injunctions for over 75 years if they determined that the requests were “just and proper.” According to the agency, the statute was meant to restrict the power of the courts and does not need it to demonstrate any additional elements.

“Consistent federal standards are important in ensuring that employees know their rights and consistent labour practices are upheld no matter where in the country they work and live,” Starbucks stated after the ruling.

However, Lynne Fox, head of the union representing the workers, claimed that Starbucks should have abandoned the lawsuit as part of its more accommodating stance on union organizing initiatives. When their employers disobey the law, working people have very few options for self-defense. That makes today’s Supreme Court decision especially horrible, said Workers United president Fox.

Starbucks fired seven employees in February 2022 for attempting to organize their Tennessee location. The matter moved through the agency’s administrative procedures while the NLRB won a court order requiring the employer to rehire the employees. Two years may pass during such procedures.

starbucks

Starbucks | AP news image

Supreme Court, Siding With Starbucks, Makes It Harder For NLRB To Win Court Orders In Labor Disputes

Starbucks was ordered to rehire the employees in August 2022 by a temporary injunction issued by a district court judge who concurred with the NLRB. Starbucks appealed to the Supreme Court following the upholding of that decision by the 6th U.S. Circuit Court of Appeals.

According to Workers United, the union organizing Starbucks workers, five of the seven workers are still employed at the Memphis store, while the other two continue involved with the organizing campaign. The Memphis store voted to unionize in June 2022.

As the case proceeded, antagonism between Workers United and Starbucks began to dissolve. The two parties declared in February that they would reopen talks to complete contract agreements this year, and they convened their first bargaining session in nearly a year in late April.

starbucks

Starbucks | PixaBay Image

Supreme Court, Siding With Starbucks, Makes It Harder For NLRB To Win Court Orders In Labor Disputes

According to the NLRB, workers at 437 company-owned U.S. Starbucks cafes have voted to unionize since late 2021, but none of those stores has achieved a labor agreement with Starbucks.

Starbucks said it’s pursuing its goal of obtaining finalized contracts for those outlets this year.

SOURCE – (AP)

Continue Reading

Business

Elon Musk Drops Lawsuit Against ChatGPT-Maker OpenAI Without Explanation

Published

on

musk
Musk | AP News Image

SAN FRANCISCO — Elon Musk dismissed his lawsuit against OpenAI just before a scheduled hearing on Wednesday.

Musk

Musk | Euro News Image

Elon Musk Drops Lawsuit Against ChatGPT-Maker OpenAI Without Explanation

Musk sued the San Francisco artificial intelligence business and its CEO Sam Altman in February, accusing them of betraying the ChatGPT maker’s basic goals of serving humanity rather than maximising profits.

In the February lawsuit filed in San Francisco Superior Court, billionaire Musk claimed that when he bankrolled OpenAI’s creation, he reached an agreement with Altman and the president, Greg Brockman, to keep the AI company as a nonprofit that would develop technology for the public’s benefit and keep its code open rather than walling it off for private profit.

musk

Musk | AP News Image

Elon Musk Drops Lawsuit Against ChatGPT-Maker OpenAI Without Explanation

However, Musk claimed in the complaint that by embracing a tight relationship with Microsoft, OpenAI and its top executives “aflame” that pact and are “perverting” the company’s objective.

Most legal experts believe Musk’s accusations, which revolve around allegations of breach of contract, breach of fiduciary duty, and unfair business practices, are unlikely to succeed in court. Musk’s attorney submitted a notice on Tuesday seeking to dismiss the entire case. There was no explanation for why it was being dropped.

musk

Musk | AP news Image

Elon Musk Drops Lawsuit Against ChatGPT-Maker OpenAI Without Explanation

Musk’s lawyers and OpenAI did not immediately return calls for comment.

SOURCE – (AP)

Continue Reading

Business

American Investor Martin Shkreli Accused Of Copying And Sharing One-Of-A-Kind Wu-Tang Clan Album

Published

on

shkreli
Martin Shkreli | AP News Image

NEW YORK — Martin Shkreli, an American investor, is facing a new lawsuit for allegedly storing and sharing recordings from a unique Wu-Tang Clan album that he was forced to sell after being convicted of securities fraud in 2017.

PleasrDAO, a cryptocurrency collective, filed the case on Monday after paying Shkreli $4.75 million for the only known copy of the album. The record, “Once Upon a Time is Shaolin,” has remained unreleased to the public, serving as a rare contemporary art piece since it was auctioned off by the renowned hip-hop group in 2015.

PleasrDAO accused Shkreli of violating their agreement by retaining digital copies of the album and circulating them extensively among his social media followers in a lawsuit filed in federal court in Brooklyn, New York.

shkreli

Shkreli | AP News Image

American Investor Martin Shkreli Accused Of Copying And Sharing One-Of-A-Kind Wu-Tang Clan Album

They allude to his recent social media posts boasting of distributing the digital recordings to “thousands of people.” According to the lawsuit, Shkreli played bits of the album during a livestream he hosted on X over the weekend, referring to it as a “Wu tang official listening party.”

Shkreli has not responded to a request for comment.

The lawsuit is the latest twist in a unique record created in protest of music’s devaluation in the streaming era but purchased at auction by Shkreli, a man infamous for inflating the price of a life-saving prescription and his “Pharma Bro” reputation.

shkreli

Shkreli | Coin Base Image

American Investor Martin Shkreli Accused Of Copying And Sharing One-Of-A-Kind Wu-Tang Clan Album

Following his conviction on securities fraud charges, Shkreli was compelled to sell the CD, which came in a hand-crafted silver and nickel casing and included a 174-page leather-bound book.

PleasrDAO stated that it purchased both the physical copy of the record and its digital rights in two transactions, in 2021 and 2024. They stated that Shkreli had erased all traces of the album’s files.

“Any dissemination of the Album’s music to the general public greatly diminishes and/or destroys the Album’s value, and significantly damages PleasrDAO’s reputation and ability to commercially exploit the Album,” the complaint claims.

shkreli

Shkreli | SF Gate Image

American Investor Martin Shkreli Accused Of Copying And Sharing One-Of-A-Kind Wu-Tang Clan Album

As of last month, the record was on its way to Australia’s Museum of Old and New Art, which announced that it would begin hosting private listening sessions this week showcasing chosen album tracks.

SOURCE – (AP)

Continue Reading

Download Our App

vornews app

Advertise Here

Volunteering at Soi Dog

People Reading

Trending