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Elliott Investment Management Pushes for Leadership Change at Southwest Airlines

Elliott Investment Management has acquired a $1.9 billion stake in Southwest Airlines and is demanding the ouster of CEO Robert Jordan, citing the airline's operational and financial struggles. In a letter to Southwest's board, Elliott criticized the airline for its outdated software and processes, which led to massive flight cancellations in December 2022. The firm highlighted the 50% drop in Southwest's stock price over the past three years and attributed this to poor execution and leadership. Elliott is pushing for significant changes, including replacing Jordan and former CEO Gary Kelly with external executives and introducing new independent directors with airline experience.

Southwest Airlines responded to Elliott's demands by expressing confidence in their current management's ability to drive long-term value for shareholders and serve customers reliably. Despite this, Southwest has faced increased competition from rivals offering better amenities and no change fees, leading to market pressure and recent changes in its boarding and seating policies. The airline has also had to scale back growth due to production cutbacks at Boeing. Despite a strong brand and market position, Southwest's financial performance has lagged behind competitors like Delta and United, which have emerged as the most profitable U.S. airlines post-pandemic.

U.S. Supreme Court to Hear Meta's Appeal in Securities Fraud Lawsuit

The U.S. Supreme Court has agreed to hear Meta's appeal in a private securities fraud lawsuit accusing Facebook of misleading investors in 2017 and 2018 about the misuse of user data by the company and third parties. The case, led by Amalgamated Bank, arose after Facebook's stock fell following revelations that Cambridge Analytica had improperly accessed data from millions of users during the 2016 presidential campaign. The lawsuit also addresses a subsequent stock decline in 2018 linked to reports of Facebook sharing data with third parties without user consent. The plaintiffs claim Facebook violated the Securities Exchange Act by making false statements about data privacy risks. Although dismissed by a district court, the 9th U.S. Circuit Court of Appeals restored the claims, prompting Facebook to seek a Supreme Court review. The justices will hear the case in their next term starting in October.

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