(Bloomberg) — JetBlue Airways Corp.’s third-largest shareholder isn’t an institutional investor, an activist firm or even an Internet-famous meme stock trader. He’s just a guy trying to make money.
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Vladimir Galkin, the executive chairman of a Miami-based electronics wholesale platform, has quietly bought an 8.1% stake in the money-losing airline.
“My investments in public companies are a hobby,” Galkin, 45, said in a recent interview. “I don’t day trade.”
It’s an expensive hobby: His stake in the airline is worth $132 million — just behind passive shareholder heavyweights BlackRock Inc. and Vanguard Group. Galkin is roughly equal to activist investor Carl Icahn’s Icahn Enterprises LP, though Icahn’s combined holdings including other investment vehicles are higher.
It’s also unusual for an individual investor without family ties to be so heavily concentrated in a single publicly traded company. But Galkin says he likes to bet big on stocks that have attracted activists like Icahn, whose position in JetBlue represents a combined 9.9% stake in the airline.
Although he never discussed JetBlue with Icahn, Galkin said, “I’ve been fortunate enough to follow activist investors before. They work out great.”
Icahn, who won two board seats at JetBlue in February, declined to comment on Galkin. JetBlue also declined to comment on him, citing a policy of not discussing specific shareholders. But the airline said it meets regularly with investors “to share progress and perspectives.” Activist Following
Galkin was born in Moscow and said he came to the U.S. with his mother and sister when he was 15. He started out selling computers to people in Russia and eventually founded an online global marketplace for wholesale electronics called HUBX in 2017. Not known on Wall Street, Galkin keeps a low profile in Miami, working out of an office at the privately held company he co-founded and still owns a majority stake in, according to founding partner Derek Wall. Wall said HUBX generates about $400 million in annual revenue.
Galkin said he and his wife also traded shares of GameStop Corp., following in the footsteps of another activist: Ryan Cohen, who revealed a large stake in the company during the meme stock craze when shares in the video game retailer soared 1,600%. Galkin said Cohen used to be a neighbor of his in Florida. Though he said he never spoke to Cohen about his trades, Galkin bought more GameStop shares every time he saw the activist’s holdings rise in securities filings. Galkin said he no longer owns shares in GameStop and declined to disclose the amount he has invested or made in it, though he said 80% of his net worth was tied up in the stock at one point.
Representatives for Cohen and GameStop did not respond to emails and phone calls seeking comment on Galkin. JetBlue Stake
In January, Galkin began buying JetBlue at about $5 a share, down from prices above $20 in 2021. That same month, the company’s CEO announced plans to step down and a federal judge blocked the carrier’s planned purchase of Spirit Airlines Inc. The antitrust ruling ended JetBlue’s years-long quest to expand through acquisitions and raised doubts about the company’s long-term growth strategy. Short sellers — those who borrowed shares to bet against the stock — flocked in, reaching nearly 20% of the airline’s publicly traded shares, a level Galkin deemed unsustainable and a potential catalyst for a rally. In February, Icahn publicly announced his nearly 10% stake in the low-cost carrier.
JetBlue hasn’t had a profitable year since the pandemic hit in 2020. But that hasn’t deterred Galkin, who is looking to build a 9.9% stake and said as recently as Aug. 12 that he was a buyer. Galkin isn’t pushing to become CEO or make major operational changes, though he says he’s met with two of the airline’s top executives. He said he’s simply in it for long-term capital appreciation.
Galkin has not yet spoken to JetBlue’s new CEO, Joanna Geraghty, but her rise has helped him invest in the struggling airline. He said he has reached out to the airline and met with JetBlue President Marty St. George and Chief Financial Officer Ursula Hurley.
JetBlue did not comment on meetings or conversations with Galkin. “I suspect they’re approaching this like they would any other major shareholder — individual or institutional — where you listen to what they have to say and take that into consideration,” said Savanthi Syth, a Raymond James analyst who gave JetBlue a “market perform” rating.
The new CEO wants to revamp the airline’s operations and boost profits, including refocusing on leisure customers in New York, New England, Florida and Puerto Rico, where it has had success in the past. It has cut 50 routes and 15 cities from its network, and has postponed $3 billion in spending on new aircraft until 2030 or later.
Geraghty’s streamlining efforts are approved by Galkin, and he said he has no immediate plans to sell his stake. One thing he would like to see, however, is greater ownership of the stock by JetBlue’s executives to help align their loyalties. He criticized the current board, saying that — excluding Icahn’s representatives — its members cumulatively own less than 1.4% of JetBlue stock.
His own professional interest as an investor is an outgrowth of his personal experience as a globetrotter. Since taking his stake, he asked JetBlue for — and was subsequently granted — an upgrade to his premium Mosaic status in the airline’s frequent flyer program.
“I’ve traveled all over the world for work and pleasure,” he said. “I don’t know much about running an airline, but I know a lot about travel.”
–With assistance from Kate O’Keeffe.
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