Southwest Ends Open Seating

Plus, Dexcom cuts sales forecast.

July 26, 2024

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Today is Friday, July 26, 2024.

The Early Bird Index today is 70.43.

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Southwest Ends Open Seating

Southwest Airlines (NYSE: LUV) jumped 5.52% on Thursday after ditching an old policy to make the business more competitive, but at least one major investor is still unhappy with the company.

Details: Southwest Airlines is ending its longstanding open seating policy, transitioning to assigned seating, and introducing premium seating options with extra legroom. It is also introducing redeye flying.

Early Bird’s Nest Egg Gains: The end of open seating and the introduction of assigned seating with premium options is good for Southwest investors.

  • By offering premium seating options with extra legroom, Southwest can charge higher fares for these seats, creating a new revenue stream.

  • Southwest also claims that 80% of its customers prefer assigned seats.

  • Assigned seating with new cabin configurations may allow for better capacity management and smoother boarding processes.

Yes, But: Elliott Investment Management, an activist investor who took out an 11% stake in Southwest, is still critical of the company despite the changes.

Quote: “This failed leadership team's announced initiatives – obvious attempts at self-preservation – are simply not credible. Too little, too late is not a strategy. It's time for new leadership.” - Elliot Investment Management.

Final Thoughts: Southwest is down 1.40% this year amid a tough time for budget airlines.

Notables

Notable Earnings Today: 3M (NYSE: MMM), Bristol-Myers Squibb (NYSE: BMY), Charter Communications (Nasdaq: CHTR), Colgate-Palmolive (NYSE: CL), Booz Allen Hamilton (NYSE: BAH), Saia (Nasdaq: SAIA), AllianceBernstein (NYSE: AB), Centene (NYSE: CNC), Newell Brands (Nasdaq: NLW), Portland General Electric (NYSE: POR), Barnes Group (NYSE: B), WisdomTree (NYSE: WT), T. Rowe Price (Nasdaq: TROW), Aon (NYSE: AON), Avantor (NYSE: AVTR), Balchem (Nasdaq: BCPC), First Hawaiian (Nasdaq: FHB), Franklin Resources (NYSE: BEN), Gentex (Nasdaq: GNTX), GrafTech International (NYSE: EAF), Sensient (NYSE: SXT), Stellar Bank (NYSE: STEL) TriNet Group (NYSE: TNET).

Notable IPOs Today: N/A.

Notable Equity Crowdfunding Campaigns Ending Today: Resurgent Realty Trust (Netcapital).

Notable Economic Events Today: Core PCE Price Index / PCE Price Index (8:30 a.m. ET), Personal Spending (8:30 a.m. ET), Michigan Consumer Expectations / Sentiment (10:00 a.m. ET).

Dexcom Cuts Sales Forecast

Source: Dexcom

Dexcom (Nasdaq: DXCM), which makes glucose monitoring systems, plummeted 36.81% (yikes!) in after-hours trading on Thursday after posting mixed financial earnings results.

Financials: Dexcom reported earnings of 43 cents per share in the past quarter, which was better than expected. But revenue came in lower at just $1 billion.

Outlook: The company cut its full-year sales forecast. CEO Kevin Sayer said the company’s execution “did not meet our high standards.”

Final Thoughts: Dexcom is having a terrible 2024 like other medical tech stocks.

Ethereum ETFs Experience Awful First Week

The first week of spot Ethereum ETFs (exchange-traded funds) was awful as the cryptocurrency price fell 8% in the past 5 days.

Final Thoughts: There were a lot of outflows from those ETFs in the past few days.

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The contents of Early Bird are intended for informational and entertainment purposes only. They do not constitute trade or investment recommendations and they are not financial or legal advice. Readers are encouraged to consult licensed professionals for personalized guidance regarding their financial or legal situations.