Is there any hope for a new, homegrown aerospace U.S. company in this day and age? This decadent beast needs to be put out of its misery but it seems to be the only one we've got left...
wat, we have plenty of aerospace companies, Boeing is the only one making consumer air travel jets right now, but they're far from the only aerospace company in the US
That's a terrible reason to buy a company, it's completely unrelated! You could just as well argue it's a terrible time to buy a struggling company, because the market is likely to drop, so you should have waited until then. The real question is, is this company a good quality company likely to grow in the future? (Or if you are the gambling type, "do I think this stock will go up?") The, secondarily, "is the price reasonable?"
I think it is clear the Boeing is not a good quality company at this time, and the fact that they have a cash-flow problem is not encouraging, since it means they are one step away from bankruptcy restructuring.
I read it as it being a good time for Boeing to sell stock, given that the market is so high.
If you have a company and you think it is overpriced, that means it's a good time to issue stock and convert share price to cash.
Tesla is one of the best examples of in history of companies doing this. They used the inelasticity of Tesla stock price to raise tens of billions of dollars in secondary stock offerings after their IPO
This is fine, this is what issuing shares is for. Raising money is the reason why companies do this at all. There's an argument to be made that they're running the company poorly (that I don't totally subscribe to), but this is the whole reason the stock market exists.
The only question I have is, if I buy this garbage, will the government bail me out and then some, and make it profitable to buy stock in this incredibly poorly led company?
From my experience, the only real way to make money on that kind of thing is either own metric shittons of the stock, or be paid big money by the company whilst all the shenanigans are going on.
My intuition is yes -- Boeing is America's last / only major commercial aviation jet mfr. -- and I don't think Uncle Sam will let them fail. Economically, I disagree with such a policy, but there's no reason I shouldn't profit from it.
Boeing did that - they split off part of their manufacturing. That, um, had some downsides in terms of quality of the finished plane - which is a really bad thing to have quality issues in.
Gosh, would be real cool if they hadn't bought all those shares, and just had the cash on hand to help... I don't know... invest in engineering and making planes fly with doors on them.
Why keep the cash on hand when you can raise cash.
I get that people have an emotional reaction to Boeing, but it's not like owning 10 billion dollars of Treasury bonds would have prevented a door plug blowout
> it's not like owning 10 billion dollars of Treasury bonds would have prevented a door plug blowout
I doubt today's announcement is any kind of endorsement by the company about its past foolishness.
I think the assumption here is that, in the past, more money should have been dedicated to ensuring high airplane reliability instead of company profits. And if that had been done, the door plug blowout wouldn't have happened.
P.S.: I'll call it how I see it: it wasn't merely foolishness, it was evil. They prioritized their own profits over the public safety with which they were entrusted.
It's not an emotional reaction to Boeing, it's a logical reaction to the fact that stock buybacks are a blatant form of market manipulation that were illegal for most of the 20th century. Nobody should be doing them, it's nothing to do with Boeing specifically. Buybacks are almost always bad for employees, customers, and if you're a big enough corporation, the world.
You misunderstood the article, Boeing is issuing new shares in order to bolster their cash on hand inventory. They’re issuing shares that didn’t exist before to raise new capital.
Boeing did $43B of stock buybacks in the 2010s. In practical terms those shares did exist before.
I don't know whether they retired the stock they bought back or put them back into the treasury, but in practice it's basically the same thing. Shares are fungible.
https://www.wsj.com/business/boeing-needing-cash-moves-to-se...
Is there any hope for a new, homegrown aerospace U.S. company in this day and age? This decadent beast needs to be put out of its misery but it seems to be the only one we've got left...
wat, we have plenty of aerospace companies, Boeing is the only one making consumer air travel jets right now, but they're far from the only aerospace company in the US
Not a bad move considering Dow and S&P are at all time highs.
That's a terrible reason to buy a company, it's completely unrelated! You could just as well argue it's a terrible time to buy a struggling company, because the market is likely to drop, so you should have waited until then. The real question is, is this company a good quality company likely to grow in the future? (Or if you are the gambling type, "do I think this stock will go up?") The, secondarily, "is the price reasonable?"
I think it is clear the Boeing is not a good quality company at this time, and the fact that they have a cash-flow problem is not encouraging, since it means they are one step away from bankruptcy restructuring.
I read it as it being a good time for Boeing to sell stock, given that the market is so high.
If you have a company and you think it is overpriced, that means it's a good time to issue stock and convert share price to cash.
Tesla is one of the best examples of in history of companies doing this. They used the inelasticity of Tesla stock price to raise tens of billions of dollars in secondary stock offerings after their IPO
I think his point is that it's a bullish market, so they will find plenty of buyers
> That's a terrible reason to buy a company...
Perhaps. But it is an excellent reason to sell a company - which Boeing is doing, by selling shares.
but Boeing's stock is down
and selling $10B in shares will drive it down further
It is already priced in and the stock is clearly not lower. Selling stock to raise capital is possibly good news compared to alternatives
so? you just reverse stock split until your stock price is back to normal.
1 reply →
This is fine, this is what issuing shares is for. Raising money is the reason why companies do this at all. There's an argument to be made that they're running the company poorly (that I don't totally subscribe to), but this is the whole reason the stock market exists.
The only question I have is, if I buy this garbage, will the government bail me out and then some, and make it profitable to buy stock in this incredibly poorly led company?
No. Ask anyone who owned GM stock at the start of the great recession.
Exactly. A bailout means the underlying business is restructured or wound-down; shareholders, bond holders typically get zip
1 reply →
An excellent point. Anyone who held common stock of GM pre-bailout saw that stock fall to zero
From my experience, the only real way to make money on that kind of thing is either own metric shittons of the stock, or be paid big money by the company whilst all the shenanigans are going on.
How does one make money from owning s** tons of stock during a restructuring? Do you have any examples
Came here to ask the same question.
My intuition is yes -- Boeing is America's last / only major commercial aviation jet mfr. -- and I don't think Uncle Sam will let them fail. Economically, I disagree with such a policy, but there's no reason I shouldn't profit from it.
> and I don't think Uncle Sam will let them fail
That is a metaphysical certitude.
It's hard to believe that despite all the bad news and scandal, the stock is higher than it was in 2015 and is in the same 100-200 dollar range.
Perhaps due to inflation?
Any company that’s too important to fail needs to be split into smaller pieces
What if being split up is a failure mode as well?
Boeing did that - they split off part of their manufacturing. That, um, had some downsides in terms of quality of the finished plane - which is a really bad thing to have quality issues in.
Boeing: “We buy high and sell low.”
Gosh, would be real cool if they hadn't bought all those shares, and just had the cash on hand to help... I don't know... invest in engineering and making planes fly with doors on them.
"Don't be snarky."
"A good critical comment teaches us something."
https://news.ycombinator.com/newsguidelines.html
(p.s. not defending boeing - just hn thread quality)
That would require thinking more than 1 quarter ahead, and their leadership clearly doesn’t have that many context tokens.
I honestly think their leadership could be replaced with an LLM at this point.
1 reply →
Speaking abstractly,Why would that be any better?
Why keep the cash on hand when you can raise cash.
I get that people have an emotional reaction to Boeing, but it's not like owning 10 billion dollars of Treasury bonds would have prevented a door plug blowout
> it's not like owning 10 billion dollars of Treasury bonds would have prevented a door plug blowout
I doubt today's announcement is any kind of endorsement by the company about its past foolishness.
I think the assumption here is that, in the past, more money should have been dedicated to ensuring high airplane reliability instead of company profits. And if that had been done, the door plug blowout wouldn't have happened.
P.S.: I'll call it how I see it: it wasn't merely foolishness, it was evil. They prioritized their own profits over the public safety with which they were entrusted.
2 replies →
It's not an emotional reaction to Boeing, it's a logical reaction to the fact that stock buybacks are a blatant form of market manipulation that were illegal for most of the 20th century. Nobody should be doing them, it's nothing to do with Boeing specifically. Buybacks are almost always bad for employees, customers, and if you're a big enough corporation, the world.
1 reply →
You're not supposed to use the $10B to buy treasury bonds.. you're supposed to use it on R&D, manufacturing, QC, etc...
3 replies →
You misunderstood the article, Boeing is issuing new shares in order to bolster their cash on hand inventory. They’re issuing shares that didn’t exist before to raise new capital.
Boeing did $43B of stock buybacks in the 2010s. In practical terms those shares did exist before.
I don't know whether they retired the stock they bought back or put them back into the treasury, but in practice it's basically the same thing. Shares are fungible.
Misunderstood the finances, more likely. The difference between selling existing shares and creating new shares is complicated.