Spirit stock takes a wild ride after Trump rekindles hope for a bailout

• Spirit Aviation stock was on a roller coater ride on Friday, down as much as 70% before erasing over half that loss.
• The budget airline stock fell over 70% back to penny stock territory.
• Trump teased a US bailout after earlier reports said talks had stalled.

The move: Spirit Aviation stock had a rollercoaster ride on Friday as investors consider the likelihood of a government bailout.

Shares of the budget air carrier fell as much as 72% to $0.39, plummeting into penny stock territory after closing at $1.40 on Thursday on reports that the company was preparing to cease operations.

Spirit stock pared the deepest losses later in the session after Trump made comments to reporters signaling a government deal may still be on the table.

The stock was delisted in 2024 and trades in the over-the-counter market.

The chart:

Why: After a The Wall Street Journal reported that the company is preparing to shut down operations as it runs out of cash before finalizing a bailout deal with the US government, Trump delivered fresh remarks about the company.

Trump told reporters that the White House gave Spirit a final proposal and that there would be an announcement on Friday or Saturday.

The president nodded to the government's Intel deal.

What it means: The report that fueled Friday's stock decline stifled hope that the federal government could loan Spirit $500 million as a lifeline to stave of collapse.

Previously, the WSJ reported that the White House was nearing an agreement to support the failing airline after Donald Trump speculated the government should help it.

As part of the plan, the US government would loan $500 million in exchange for warrants that give it the right to buy a majority stake in the company, according to Bloomberg.

Business Insider analysis found that Spirit going under could cause a 14% hike in airfare prices, compounding the already high flying costs due to the inflationary pressure from the war in Iran.