This Billionaire Just Ponied Up $108 Million to Defend Southwest’s Board from Elliott’s Takeover

Southwest Airlines and Elliott Investment Management are like the in-laws who just can’t agree on how to run the family reunion. 

It’s been a drawn-out battle, with Elliott trying to swap out Southwest’s CEO, Bob Jordan, and throw some of the board members overboard—including Executive Chairman Gary Kelly. Elliott, with its 8% stake in Southwest, even pulled out the big guns, planning to call a special shareholder meeting to get their way. But this time, Southwest’s board is swinging back, and they’ve got a billionaire in their corner.

Rakesh Gangwal, the co-founder of IndiGo (India’s largest airline by passengers) and Southwest’s newly appointed board member, said “enough with the shaking hands and kissing babies.” 

He’s putting his money where his mouth is ($108 million to be exact). Gangwal recently snapped up 3.6 million shares of Southwest, averaging about $29.64 per share, according to SEC filings. And the timing? Just as the company opened its insider trading window. Now that’s one way to show confidence in the team.

This purchase couldn’t have come at a better time for Southwest. After all, the airline’s been hit with some heavy turbulence from activist investor Elliott, who’s been pushing hard for leadership shakeups. But Gangwal’s not having it. In a public statement, he basically said, “Thanks, but no thanks.” According to Gangwal, further leadership changes would be “counterproductive and not in the best interest of shareholders.”

Let’s not forget, this isn’t just any board member buying stock. Gangwal is a seasoned veteran in the airline world. He co-founded IndiGo, and his resume reads like a who’s who of the airline industry—former exec at US Airways, Air France, and United Airlines. This guy knows his way around an airplane hangar and a boardroom.

And investors seem to be liking what they see. Following Gangwal’s stock buy, Southwest shares rose as much as 4.7%. Not a bad reaction for a company that’s been under the microscope.

Meanwhile, Elliott isn’t backing down just yet. They’re still gunning for more changes, especially in the C-suite. Elliott’s main beef? They want Bob Jordan out and a total revamp of the board. But with Gangwal dropping millions into Southwest stock and backing the current leadership, it seems like they’re going to have to bring more ammunition to the fight.

Southwest’s Investor Day at the end of September added even more optimism, with upbeat guidance giving the stock another shot in the arm. And while executive chairman Gary Kelly has announced he’ll retire after the 2025 annual meeting, it’s clear the board isn’t rushing into any more dramatic changes. They're playing it safe. And for now? The stock's up 9% this year.

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Stock.News does not have positions in companies mentioned.