Spirit Airlines (SAVE 53.06%) is getting extra time to manage its debts, reducing immediate bankruptcy concerns. Its stock rose as much as 73% on Monday morning, and was up 58% by 1 p.m. ET.
December Deadline
This year has been tough for Spirit. In January, its sale to JetBlue Airways was blocked due to competition issues. Additionally, an RTX engine problem has grounded part of its planes.
The airline faced a deadline on October 21 to refinance or extend its bonds, or risk losing its credit card processing agreement, which would hinder ticket sales and potentially lead to bankruptcy.
On Friday, Spirit announced it got an extension until December 23. Investors hope this time, along with lower fuel prices and cash from its credit line, will help Spirit avoid bankruptcy.
Should You Buy Spirit Stock?
Despite the recent surge, Spirit’s shares are still over 95% below their peak this year. This suggests potential for growth if the airline resolves its issues. However, the market indicates that challenges remain.
Spirit’s banks want stability, but the airline faces economic challenges. For risk-tolerant investors, placing a speculative bet on Spirit might be rewarding within a diversified portfolio. Just be aware of the possibility of losses, and stay secure in your investment seat!
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