Author’s analysis—assumed break price of $5 for Hawaiian and $6 for Spirit.
also:
Without a merger, Spirit may be financially distressed based on recent operating results. There’s some risk that Spirit can’t continue as a going concern without a merger.
Even if JetBlue prevails in court, there is some risk that the deal is recut as the offer was made in a much more favorable environment for airlines, though clauses in the merger agreement may prevent this.
In my opinion, Spirit Airlines, Inc. equity is undervalued at around $15, but you’re signing up for tremendous volatility over the coming months. The equity can get trashed under $5 or you can get the entire upside.
From https://archive.ph/SbuXU, for calculating the market-implied odds:
also:
So maybe you’re overestimating the upside?
From https://archive.ph/rmZOX: