MDC Financial Research's Michael Cohen post-closing arguments update on $JBLU / $SAVE merger trial

Dec 7, 2023

Michael D. Cohen, CEO & Director of Research at MDC Financial Research, discusses the JetBlue and Spirit Airlines merger trial. They analyze the market definition, potential harm to consumers, and the judge's leaning. Concerns about Spirit's survivability and the impact of the judge's ruling are highlighted. The government's argument, JetBlue's response, and the judge's focus on the case are discussed.

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Introduction

00:00 • 3min

Closing Arguments and Judicial Behavior

03:29 • 13min

Joke about Spirit Airlines and Market Definition in Merger Trial

16:36 • 3min

The Judge's Focus and Government's Argument

19:25 • 5min

Judge's Concerns and Future Implications

24:32 • 15min

Negotiation and Divestiture

39:04 • 17min

Perspectives on the merger trial and the judge's role

55:37 • 2min

Government's Argument and JetBlue's Response

57:35 • 10min

Michael D. Cohen, CEO & Director of Research at MDC Financial Research, LLC, joins the podcast for the second time to share his thoughts on the JetBlue $JBLU / Spirit Airlines $SAVE merger trial now that closing arguments have been made. Known for their “Event-Driven Legal” investment-research, Michael Cohen and his team follow significant legal disputes and are closely watching the $JBLU / $SAVE case.

For more information about MDC Financial Research, please visit: https://mdcfinancial.com/

For more on the SAVE / JBLU trial, see podcast #204, Michael's first appearance: https://www.youtube.com/watch?v=BFN_iXHdF78

Chapters:

[0:00] Introduction + Episode sponsor: Alphasense

[1:41] Update since half-time report: overall thoughts on trial now that we have had closing arguments - $JBLU / $SAVE merger trial

[3:55] $JBLU / $SAVE merger trial closing arguments

[11:04] Feel for how Judge is likely to craft opinion on the case

[14:20] Potential additional remedies to get merger over the hurdle

[17:02] Market definition and timing of the deal (how does this affect consumers)

[23:41] Step 3: the burden of proof from the DOJ, showing there is harm to consumers

[24:32] Cont'd: timing of the deal (how does this affect consumers

[27:51] United Airlines testimony

[35:03] Commentary on Spirit's survivability if merger doesn't go through

[41:38] JetBlue's second expert witness

[43:43] Dr. Chipley's testimony

[45:54] Closing arguments cont'd: competition be preserved

[48:02] Closing arguments cont'd: balance of nationwide benefit vs. local harm

[52:28] Main divergence of opinion based on being in the courtroom

[56:52] Hot docs

[59:05] Odds of merger going through closes vs. failing vs. re-pricing

Today's episode is sponsored by: Alphasense

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