Another shoe is about to drop at Southwest

I did not say "THE" other, because I don't know what shoe will drop, but am sure some shoe will.

A month ago, I wrote about how Southwest Airlines announced that, as of the first of the year, it would be getting rid of its traditional "cattle car" boarding. As part of that, and noting it was under "activist" shareholder pressure, I wondered if THE other shoe would drop.

THE other shoe? That would be ending "bags fly free."

Again, we don't know what exactly the fallout will be, but Elliott Investment Management, the biggest pusher, and a vulture capitalist hedge fund to boot, has acquired 10 percent of Southwest stock. Per this story and others, that gives it the right to call a shareholder meeting.

UPDATE, Sept. 13: Part 3 of this series, about a semi-cave by Southwest, is now up.

Elliott's on record as wanting to can Southwest's CEO Robert Jordan, and chairman of the board, Gary Kelly, the former CEO who followed in the steps of the iconic founder, Herb Kelleher. It's proposed a slate of 10 new board candidates. Jones already said he won't resign.

Other than turning over two-thirds of the 15-member board, Elliott hasn't mentioned details, but this is surely part of it.

Other hints, though, per this public Facebook post? Guy notes that Elliott's trustees include a shitload of people from budget airlines. 

Seriously, Southwest Frontier? Southwest Spirit? Oh, it's worse, per WFAA. JetBlue and Ryanair? Fuck that shit, especially if my bags don't fly free. I'm looking on Travelocity first at legacy airlines. American isn't charging me for the air I breathe, at least.

Add in that Elliott's head is a shit-stirrer — a REAL shit-stirrer — and the Sept. 9 meeting will be a headbanger.

Adding to this? Southwest adopted a poison pill defense this summer. It's triggered if any single shareholder hits 12.5 percent, not far away from Elliott's 10 percent. It would give all other shareholders the right to buy stocks at a discount. Specifically:

(A)ll other Southwest shareholders would have the opportunity to buy additional shares equal to their current stake at a 50% discount.

So, "additional" shares, it sounds like, as in a split to water down Elliott's holdings. The poison pill is good for one year.

Elliott is a corporate raider, pure and simple. That said, I don't know how much of a deterrent Southwest's stock-split poison pill might or might not be. We'll soon find out, won't we?

Southwest ain't perfect. A lot of people knew about its pilot scheduling computer system problems long before the Christmas week strandings. It's improved. It still has problems at times, though, and still isn't perfect on flight delays.