Spirit Airlines, Inc. ( SAVE ) shares are moving lower on Friday following a report suggesting that the company is exploring the possibility of filing for bankruptcy.

The Details: According to the Wall Street Journal, Spirit has been in talks with bondholders and creditors regarding support for a Chapter 11 bankruptcy.

This comes after a federal district court judge blocked the company’s merger with JetBlue back in January. The two airlines have abandoned the potential merger, citing that they likely could not overcome legal and regulatory challenges.

Following the ruling, Spirit has begun shrinking its operations, cutting dozens of routes for November and December. Also, the airline plans to shrink its capacity by almost 20% during the fourth quarter.

Spirit has reported losses in almost every quarter since February 2020, per data from Benzinga Pro. For the 2024 fiscal-year second quarter, the company reported an adjusted net loss of $157.9 million.

Is Spirit A Good Stock To Buy?

An investor can make a few decisions when deciding whether a stock is a good buy. In addition to valuation metrics and price action which you can find on Benzinga's quote pages – like Spirit Airlines ( SAVE )‘s page for example – there are factors like whether or not a company pays a dividend or buys a large portion of its stock each quarter.

These are known as capital allocation programs. Spirit Airlines ( SAVE ) does not pay a dividend, but obviously has a few ways it can return value to shareholders. Feel free to search Benzinga's dividend calendar for the next company that is due to pay a dividend and determine what kind of yield you can earn for holding a share of the company.

For example, if you're looking to earn an annualized return of 14.96%, you'll need to buy a share of XAI Octagon FR & Alt Inc by the Oct. 15, 2024. Once done, you can expect to receive a nominal payout of $0.09 on Nov. 1, 2024.

Buyback programs are obviously different and highly variable. A company can approve a buyback program and purchase shares as it sees fit over the course of time in which the buyback was authorized. Looking through the latest news on Spirit Airlines ( SAVE ) will often yield whether or not the company has approved a buyback program recently. Buyback programs usually serve as a support for share prices, serving as a backstop for demand.

Related Link: What’s Going On With Delta, United and Spirit Airlines Shares Tuesday?

SAVE Price Action: At the time of writing, Spirit stock is trading 26.8% lower at $1.63, according to data from Benzinga Pro.

Image: Photo via Wikimedia Commons