Elliott crosses 10% mark in Southwest shares by Investing.com

Activist investor Elliott Investment Management has acquired 10% of the common stock of Southwest Airlines (NYSE: ). The move gives the hedge fund the ability to call a special meeting with the airline, according to Reuters.

The development comes just days before a meeting scheduled for Sept. 9, where both sides aim to address issues that have driven Southwest’s stock value down substantially over the past three years.

The hedge fund, known for its activist investing and management of $70 billion in assets, has called for the ouster of Southwest CEO Robert Jordan and Executive Chairman Gary Kelly. Jordan has made it clear that he has no intention of resigning.

Moreover, Elliott has expressed its intention to propose 10 candidates for the airline’s board, which currently has 15 members. The fund previously held an 11% economic interest through derivatives, and has now converted some of these holdings into common shares to reach the 10% mark, while its overall economic interest remains the same.

Special meetings are rare events that are called to address pressing shareholder issues outside of the annual meeting cycle. If Elliott initiates such a meeting, it would mark a significant escalation of the dispute that became public in June.

Amid efforts to improve its public image and stock price, Southwest implemented a shareholder rights plan to prevent any single investor from accumulating more than 12.5 percent of the company’s stock.

In an effort to boost its appeal to customers and investors, Southwest announced in July that it would introduce seats with more legroom, switch to assigned seating and welcomed a new board member.

Despite these initiatives, Southwest’s stock price had halved its market value in the three years leading up to June 7.