Price Forecast:

Bullish Case: If Spirit Airlines can successfully restructure its debt and navigate regulatory challenges, it may stabilize and recover, driven by rising demand for air travel and potential market consolidation, positioning SAVE for a notable rebound.

Bearish Case: Continued operational struggles, combined with the threat of bankruptcy and regulatory hurdles following failed merger attempts, put significant downward pressure on SAVE’s stock, potentially leading to further declines and market distrust.

Potential Outcomes:

1) Bankruptcy filing (60%): Leads to substantial liquidation or restructuring, likely diminishing stock value significantly.

2) Successful restructuring (20%): Offers a lifeline and could restore market confidence.

3) Merger talks with another airline (15%): Could provide growth potential but remains fraught with regulatory risks.

4) Continued operational issues (5%): Results in sustained market pessimism and lower stock performance.

Trading Oracle: Focus on implementing a bearish credit spread by selling $0.50 puts and buying $1.00 puts, targeting short-duration expirations to leverage the near-term volatility spike. This high-risk, high-reward strategy utilizes market uncertainty to profit from SAVE's declining sentiment while keeping potential losses minimized.

November 17, 2024