(Bloomberg) — JetBlue Airways Corp.’s third-biggest shareholder isn’t an institutional investor, an activist firm or even an internet-famous meme stock trader. He’s just a guy trying to make a buck.
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Vladimir Galkin, the executive chairman of a Miami-based electronics wholesaling platform, has quietly bought up an 8.1% stake in the money-losing airline.
“My investments in public companies are a side hobby,” Galkin, 45, said in a recent interview. “I don’t day trade.”
It’s an expensive side hobby: His stake in the carrier is worth $132 million — and ranks right behind passive shareholder heavyweights BlackRock Inc. and Vanguard Group. Galkin is roughly on par with activist investor Carl Icahn’s Icahn Enterprises LP, although Icahn’s combined holdings including other investment vehicles are higher.
It’s also unusual for an individual investor without family ties to be so highly concentrated in a single publicly listed company. But Galkin says he likes to bet big on stocks that have attracted activists like Icahn, whose position in JetBlue amounts to a combined 9.9% of the airline.
Although he’s never discussed JetBlue with Icahn, Galkin said “I’ve had good fortune having followed activist investors before. They work out great.”
Icahn, who in February won two board seats at JetBlue, declined to comment on Galkin. JetBlue also declined to comment on him, citing a policy of not discussing specific shareholders. But the airline did say that it meets regularly with investors “to share progress and perspectives.” Activist Following
Galkin was born in Moscow and said he came to the US with his mother and sister when he was 15. He started out selling computers to people in Russia, eventually setting up an online global marketplace for wholesale electronics in 2017 called HUBX. Unknown on Wall Street, Galkin keeps a low profile around Miami, working out of an office at the closely held company he co-founded and still owns a majority stake in, according to founding partner Derek Wall. Wall said HUBX generates about $400 million in annual revenue.
Galkin said he and his wife also traded shares of GameStop Corp., following in the footsteps of another activist: Ryan Cohen, who disclosed a large stake in the company during the meme stock frenzy when shares in the video game retailer soared 1,600%.Galkin said Cohen was formerly a neighbor of his in Florida. While he said he never spoke with Cohen about his trades, Galkin bought more GameStop stock each time he noticed the activist’s holdings tick higher in securities filings. Galkin said he no longer owns shares in GameStop and declined to make public the amount he invested in it or earned, though he said 80% of his net worth was in the stock at one point.
Representatives for Cohen and GameStop did not respond to emails and phone calls seeking comment on Galkin. JetBlue Stake
In January, Galkin began buying JetBlue for around $5 a share, down from prices above $20 in 2021. That same month, the company’s chief executive officer announced plans to step down and a federal judge blocked the carrier’s planned purchase of Spirit Airlines Inc. The antitrust ruling ended JetBlue’s years long quest to expand by acquisition and threw into question the company’s long-term growth strategy. Short sellers — those borrowing shares to bet against the stock — flooded in. They reached nearly 20% of the airline’s public float, a level Galkin considered unsustainable and a potential catalyst for a rally. In February, Icahn disclosed his nearly 10% holding in the low-cost airline.
JetBlue hasn’t had a profit-making year since the pandemic struck in 2020. But that didn’t faze Galkin, who aims to build a 9.9% stake and as recently as Aug. 12 said he was a buyer. Galkin isn’t pushing to become a director or urging major operational changes, although he claims he’s met with two top executives at the airline. He said he’s simply in it for long-term capital appreciation.
Galkin hasn’t yet spoken with JetBlue’s new CEO, Joanna Geraghty, but her ascendancy helped prompt his decision to invest in the struggling carrier. He said he initiated contact with the airline and has met with JetBlue President Marty St. George and Chief Financial Officer Ursula Hurley.
JetBlue had no comment on any meetings or discussions with Galkin.“I’m guessing that they are approaching this as they would any other large shareholder — individual or institutional — where you listen to what they have to say and take that into consideration,” said Savanthi Syth, a Raymond James analyst who has a “market perform” rating on JetBlue.
The new CEO is seeking to revamp the carrier’s operations and boost profits, including turning its focus back to leisure customers in New York, New England, Florida and Puerto Rico, where it has had success in the past. It’s cut 50 routes and is dropping 15 cities from its network, and has put off $3 billion in spending on new planes until 2030 or later.
Geraghty’s streamlining efforts meet with Galkin’s approval and he said he has no near-term plans to sell his stake. One thing he’d like to see, however, is greater ownership of the stock by JetBlue’s directors to help align their loyalties. He criticized the current board, saying that — with the exception of Icahn’s representatives — its members cumulatively own less than 1.4% of JetBlue’s shares.
His own professional interest as an investor is an outgrowth of his personal experience as a globetrotter. Since taking his stake, he asked JetBlue for — and subsequently received — an upgrade to its premium Mosaic status in the carrier’s frequent flyer program.
“I’ve traveled throughout the world for work and pleasure,’ he said. “I don’t know a lot about running an airline, but I do know a lot about travel.”
–With assistance from Kate O’Keeffe.
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