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Virgin America Stock Takes Off After Buyout Report

March 23, 2016 12:13 pm
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Virgin America Inc (NASDAQ: VA) shares are surging on Wednesday following reports that the company is in talks concerning a potential buyout. Sources close to the matter say that Virgin America is reaching out to potential buyers after getting word of takeover interest.

The buyout rumors have sent Virgin America’s stock soaring more than 13.7 percent, but the market doesn’t seem to be spreading the love around to the rest of the airline industry.

Shares of United Continental Holdings Inc (NYSE: UAL), Southwest Airlines Co (NYSE: LUV), American Airlines Group Inc (NASDAQ: AAL) and Delta Air Lines, Inc. (NYSE: DAL) are all trading flat to down on Wednesday.

Reports indicate that Virgin America may not choose to pursue the buyout deal, and the company is not commenting on the report. Virgin America only went public about a year and a half ago. After Wednesday’s 13 percent move, shares now trade more than 50 percent above their 2014 IPO price.

Related Link: Airline Investors Watching Brussels Terrorist Attack Closely

The Brussels terrorist attacks sparked initial fears among airline investors on Tuesday, but the stocks have so far proven to be fairly resilient in the wake of the news. So far this year, shares of United Continental and Southwest Airlines have outperformed the market, while Delta and American have lagged.

Disclosure: the author holds no position in the stocks mentioned.

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