In recent weeks, Spirit Airlines (NYSE: SAVE) might have become transformed into the world’s newest meme stock as it went on a veritable – and ongoing – stock market rollercoaster ride after the court blocked its merger with JetBlue (NASDAQ: JBLU).
Once the $3.8 billion acquisition of Spirit Airlines was prevented over DoJ’s antitrust concerns, the stock of the aviation company fell sharply by approximately 50% and remained in what appeared as a downward spiral.
This trajectory was rapidly reversed after Dave Portnoy – the founder and owner of Barstool Sports – announced that the has bought a significant amount of the beleaguered company’s shares on Thursday, January 18.
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Portnoy has since been hyping the stock, calling Spirit “the people’s airline” and linking to stories about shady and dangerous events that took place on other airlines, stating that it didn’t happen on Spirit.
He also, in his typical humorous fashion, stated that DDTG – his show – has upgraded the airline stock’s rating to “mega buy.” Portnoy, in the same X post, reminded his followers that he is not a financial advisor but a gambler.
The renewed upward momentum was further reinforced after JetBlue and Spirit Airlines revealed they are planning to challenge the ruling that blocked their merger.
‘Diamond hands’ or sell at $12?
Portnoy’s involvement with Spirit – and his use of slang typically associated with meme stock communities – might have sparked some memories of the hopes investors had after it was revealed that Ryan Cohen bought a significant stake in the now-bankrupt Bed, Bath, and Beyond (BBBY).
Much like the writing on the wall regarding BBBY, thanks to Cohen’s filings, Portnoy was transparent in stating that he would consider selling should Spirit Airlines reach $12 or $13 per share. Not long after buying the stock, however, he commented he was “diamond hands” on the stock.
Whether the Barstool Sports’ founder plans to sell or hold SAVE “to the moon,” the stock has undergone a staggering recovery since he acquired it. The company went from approximately $4.50 per share at the time of purchase to approximately $9 at the time of publication – a 100% surge within 5 days.
Still, while Jet Blue and Spirit are challenging the ruling and Portnoy is vocally bullish on SAVE stock, it is worth remembering that the company is teetering at the edge of bankruptcy, making it a very risky investment.
SAVE’s long-term prospects
While it may be unwise to attempt to make long-term predictions on a stock whose fate is as uncertain as SAVE’s, the 17 Wall Street analysts taken into account by TradingView generally recommend selling it.
At the time of publication, none of the 17 recommend buying. Furthermore, 7 recommend holding the stock, and 2 and 3 rank it as a “sell” and “strong sell,” respectively. According to the data available available on January 23, SAVE is considered a “buy” exclusively by Portnoy and DDTG.
Similarly, technical analysis (TA) metrics available through TradingView generally signal that risk-averse investors should steer clear of SAVE.
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Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
