Billionaire hedge fund investor Paul Singer just began cashing in on one of his biggest winning bets: Southwest Airlines Co. (NYSE:LUV).
Singer's hedge fund, Elliott Investment Management, sold roughly 5.3 million shares of the low-cost carrier, trimming its massive position as the stock trades nearly 75% above Elliott's average buy price of about $29.10, according to a Schedule 13D filed on Feb. 23.
Even after the sale, Elliott still holds about 45 million shares. Southwest is now one of the fund's largest and highest-conviction positions.
Southwest Airlines Turnaround Validates Elliott's Bet
Singer’s timing is notable. Southwest stock surged 68% over the past year and it’s up 23% year-to-date, fueled by a business model overhaul and improved profit outlook.
Southwest Airlines’ rally accelerated after the airline delivered exceptionally strong guidance, projecting at least $4/share in adjusted EPS for 2026 — a dramatic jump from just 93 cents per share in 2025.
Investors also cheered structural changes, including the shift to assigned seating, new extra-legroom options, and added ancillary revenue streams like checked bag fees on certain fares.
The transformation has pushed Dallas-based Southwest to new highs and validated Elliott's activist thesis, which focused on improving profitability and modernizing the airline's decades-old operating model.
Analysts remain broadly constructive, with recent price targets implying about 17% upside from current levels.
Profit-Taking — Or A Signal The Easy Gains Are Gone?
Elliott's decision to sell into strength doesn't necessarily signal a loss of confidence. Hedge funds typically trim positions after large gains to lock in profits and rebalance risk, especially after a thesis plays out.
But the move also highlights a key shift. Much of Southwest's recent upside has been driven by multiple expansion and improving expectations — not just operational results.
With the stock already pricing in a significant turnaround, future gains may depend less on narrative and more on execution.
Elliott isn't exiting. But it is taking money off the table — and that alone is worth watching.
Image: Shutterstock
