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Southwest Airlines (LUV) stock is in focus after Elliott Investment Management officially kicks off a proxy battle for board control, requesting a special shareholder meeting in December. Seana Smith and Brad Smith outline what investors need to know on Morning Brief.
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This post was written by Naomi Buchanan.
Let's take a look at Southwest. Elliot investment management formalizing its proxy fight at Southwest and informing the airline that is requesting a special shareholder meeting in December. That's according to report from Bloomberg. The activist investor nominating eight directors to Southwest board. This is Elliot's first proxy battle since 2017. We saw an initial spike on shares and here just ahead of the open, you're looking at a gain of just about 1900th of a percent. Again, this notice here from Elliott is first for a special meeting. They're looking to uh seek that meeting on December 10th. In terms of what this means going forward, we know that Elliot has amassed a 11% stake in Southwest, has insisted that it wanted its CEO Bob Jordan to be removed. Prior to shrinking the board, also said that it would nominate a 10 person slate. So again, Elliott has been very, very vocal about some of the changes that they have wanted to be that they have wanted to make or seen see wanted to see at Southwest here over the last several weeks. So again, this is an escalation here. Elliot now formalizing its proxy fight and we're seeing a bit of a move higher here in Southwest shares ahead of the open.
I would say they formalized at the second they took out the domain name strongersouthwest.com. So that's been out there. The company had already talked about and Elliott is what I'm saying had already been talking about being determined to call a special meeting at which these shareholders voices could be heard their words there. They are also encouraging some of those fellow shareholders to call back their shares, prepare to elect an independent best in class board of directors. They had said all of this prior to the Southwest investor day. So none of this should come as a surprise, but yes, going more formal with it, according to this reporting and some of the things that they're looking to do, strengthen management capabilities, ensuring strong operational performance, one of the top line bullets that they put in their overall pitch to shareholders here as well. And then looking to facilitate more investment in technology and new assets. We'll see exactly what those investments may look like in the future as well.