Shares of Spirit Airlines (NYSE:SAVE) have lost over 50% of its value in highly volatile midday trading on Tuesday, after a US federal judge blocked the company's pending $3.8B merger with rival JetBlue Airways (NASDAQ:JBLU).
US District Judge William Young sided with the US Department of Justice, agreeing that 'the combination would be anticompetitive,' as he ruled to prevent the deal from going through.
The proposed combination of two airlines "does violence to the core principle of antitrust law: to protect the United States' markets - and its market participants - from anticompetitive harm," the judge said, adding that "the consumers that rely on Spirit’s unique, low-price model would likely be harmed."
The companies may still file an appeal to the ruling.
Shares of JetBlue are gaining around 6% following the announcement.
Notably, the stock of Hawaiian Airlines (HA) is also seeing increased volatility, trading nearly 20% lower at one point, but later recouping the losses, as investors question what the ruling may mean for Hawaiian's proposed acquisition by Alaskan Airlines (ALK).