The influencer who became the third largest shareholder of Jetblue Airways self-exposes the secret to making money: trading stocks with aggressive investors!

After the "Wolf of Wall Street", billionaire activist investor Carl Icahn disclosed his 9.91% stake in the U.S. low-cost airline Jetblue Airways in February this year, another major shareholder of Jetblue Airways has emerged half a year later.

But this time, the situation is somewhat different. The person who holds 8.1% of this airline that has been in a loss-making situation since the COVID-19 pandemic in 2020 and ranks as the third largest shareholder is not an institution or an activist investor, but a little-known "ordinary person".

According to media reports, 45-year-old Russian Vladimir Galkin operates an online wholesale platform for electronic products in Miami, Florida, quietly acquiring $132 million worth of shares in Jetblue Airways. His shareholding is even comparable to that of Wall Street giant Carl Icahn, second only to passive investment giants BlackRock and Vanguard Group.

Born in Moscow, Galkin moved to the United States with his mother and sister at the age of 15, starting his career by selling computers to Russians. He eventually founded the global online electronic product wholesale market HUBX in 2017 and still holds the majority of shares. HUBX generates an annual revenue of about $400 million.

Galkin claims that he does not engage in day trading and stock trading is not his main business but a hobby, but he has a "get rich" secret of following along with activist investors in "stock trading". This is also the main reason why he followed the "Wolf King" Icahn to invest in Jetblue Airways.

For example, during the retail investor battle against institutions in 2021, he and his wife both invested in the leading stock of retail investors, GameStop, following in the footsteps of activist investor Ryan Cohen.

Galkin stated that Cohen is his neighbor in Florida, although the two have never directly discussed stock trading, whenever regulatory filings revealed that Cohen bought more GameStop shares, Galkin would also follow suit and increase his holdings. At one point, up to 80% of his net worth was invested in GameStop. At that time, GameStop had surged by 1600%.

Although Galkin claims he no longer holds GameStop shares and refuses to disclose the amount he invested in the stock or earned from it, his investment logic in Jetblue Airways is clearly similar to the period when he held GameStop shares:

Although Galkin has never discussed Jetblue Airways with Icahn, he stated: "I have made money by following activist investors before, and their performance is great."

For instance, in January this year, Galkin started buying Jetblue Airways at around $5 per share, a price that was only a quarter of the stock price when it exceeded $20 in 2021. By February, Carl Icahn disclosed that he had acquired nearly 10% of the shares through purchases in January and February, believing that Jetblue Airways' stock was undervalued and presented an attractive investment opportunity.

In January this year, Jetblue Airways' CEO announced his resignation, and a U.S. federal judge blocked the company's acquisition of another low-cost airline, Spirit Airlines. With Jetblue Airways' goal of expansion through acquisitions now in doubt, the company's long-term growth strategy has been questioned. Short sellers once held nearly 20% of Jetblue Airways' outstanding shares, and Galkin believes that this level is unsustainable, potentially leading to a rebound in the stock price Jetblue Airways fell by 20.66% on Monday, August 12th, marking the largest single-day decline since the company's U.S. IPO in mid-April 2002. Although the stock price rose for three consecutive days starting from Wednesday, it still fell by about 22% this week.

The sharp drop in stock price this week was mainly due to Jetblue Airways announcing an issuance of over $3 billion in debt, which led to credit rating downgrades by Moody's and S&P. Moody's downgraded the company's rating to B3, further into junk status. S&P lowered the rating from B to B-, but with a stable outlook.

The Motley Fool, a U.S. stock research institution, stated that Jetblue Airways' new debt issuance is to reserve cash for a possible recession, and the proceeds will be used to refinance some of the debt due in the coming years. However, investors are concerned about the company's leverage situation and the resulting increase in interest expenses. They believe that Jetblue Airways seems to have taken on too much debt to meet short-term capital needs:

"Jetblue Airways is still a troubled company facing a difficult operating environment. Even if it can weather the storm, there is currently not enough reason to buy. The cyclicality of the airline industry is well known, and if demand continues to decline over the next few quarters, Jetblue Airways is ill-prepared for it."

TD Cowen analysts estimate that higher debt balances and payments will lead to a $0.10 decrease in earnings per share in 2024, and a decrease of over $0.30 in earnings per share in 2025 and 2026, further reducing the likelihood of Jetblue Airways returning to profitability. The U.S. airline industry is facing challenges of declining consumer demand, eroding pricing power, which has a greater impact on small airlines like Jetblue Airways.

However, Galgkin believes these concerns are unfounded. He continued to buy Jetblue Airways on August 12th, planning to increase his stake to 9.9%. He stated that he does not intend to become a board member or urge for major operational changes, but rather for long-term capital appreciation. Icahn, on the other hand, stated in February that he would gain two board seats at Jetblue Airways.

Galgkin mentioned that another major reason for him to continue holding shares is the new CEO of Jetblue Airways, Joanna Geraghty, and he is optimistic about the streamlined operational strategy. He also advocates for Jetblue Airways board members to hold more shares to align their interests with shareholders. Apart from the board representatives sent by Icahn, the total stake held by board members in Jetblue Airways is less than 1.4%.

The new CEO is seeking to reform Jetblue Airways' operations and improve profitability, including refocusing on leisure travelers in New York, New England, Florida, and Puerto Rico. The company has also cut 50 routes, canceled flight networks in 15 cities, and postponed the $3 billion new aircraft investment plan to 2030 or later