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...
errantspark 2 hours ago [-]
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
game_the0ry 2 hours ago [-]
Not a bad move considering Dow and S&P are at all time highs.
prewett 2 hours ago [-]
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.
s1artibartfast 2 hours ago [-]
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
michaeljx 2 hours ago [-]
I think his point is that it's a bullish market, so they will find plenty of buyers
bell-cot 2 hours ago [-]
> 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.
metalliqaz 2 hours ago [-]
but Boeing's stock is down
and selling $10B in shares will drive it down further
paulpauper 2 hours ago [-]
It is already priced in and the stock is clearly not lower. Selling stock to raise capital is possibly good news compared to alternatives
sidewndr46 2 hours ago [-]
so? you just reverse stock split until your stock price is back to normal.
s1artibartfast 2 hours ago [-]
Stock price is irrelevant in isolation.
a2dam 2 hours ago [-]
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.
epicureanideal 2 hours ago [-]
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?
bityard 2 hours ago [-]
No. Ask anyone who owned GM stock at the start of the great recession.
paulpauper 2 hours ago [-]
Exactly. A bailout means the underlying business is restructured or wound-down; shareholders, bond holders typically get zip
bawolff 2 hours ago [-]
As they should.
Investments by definition is a risk. If you want garunteed returns use a savings account or GIC.
petesergeant 2 hours ago [-]
An excellent point. Anyone who held common stock of GM pre-bailout saw that stock fall to zero
bombcar 2 hours ago [-]
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.
s1artibartfast 1 hours ago [-]
How does one make money from owning s** tons of stock during a restructuring? Do you have any examples
chromatin 2 hours ago [-]
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.
topspin 2 hours ago [-]
> and I don't think Uncle Sam will let them fail
That is a metaphysical certitude.
2 hours ago [-]
paulpauper 2 hours ago [-]
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.
alexpetralia 2 hours ago [-]
Perhaps due to inflation?
petesergeant 2 hours ago [-]
Any company that’s too important to fail needs to be split into smaller pieces
s1artibartfast 1 hours ago [-]
What if being split up is a failure mode as well?
AnimalMuppet 1 hours ago [-]
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.
master_crab 2 hours ago [-]
Boeing: “We buy high and sell low.”
xracy 2 hours ago [-]
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.
(p.s. not defending boeing - just hn thread quality)
epicureanideal 2 hours ago [-]
That would require thinking more than 1 quarter ahead, and their leadership clearly doesn’t have that many context tokens.
ajhurliman 2 hours ago [-]
I honestly think their leadership could be replaced with an LLM at this point.
ihsw 2 hours ago [-]
[dead]
s1artibartfast 2 hours ago [-]
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
CoastalCoder 2 hours ago [-]
> 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.
s1artibartfast 1 hours ago [-]
I find it interesting how people tend to reduce everything to money, as if it is a solution to everything. Not all problems are financial problems that can be fixed with more funds. It matters how you spend those funds.
One of the big problems with Boeing is that they had two parallel quality systems with imperfect and overlapping reporting. I'm sure they could have spent twice as much and had four overlapping quality systems, but I'm not confident that would improve reliability opposed to reduce it.
If the solution to everything was money, companies like wework, quibi, or theranos would just need more investment.
Not everything is a money problem
CoastalCoder 1 hours ago [-]
In case you're getting that from my GP post, let me clarify.
I believe that in this particular situation, Boeing intentionally cut some safety corners to improve their profitability:
1) Pushed their airplane production rate so high that many of their workers didn't believe they were producing safe airplanes.
2) Took various steps to convince the FAA to allow the 737 MAX to fly with the same type rating as other 737s, despite it being pretty clear to outsiders that MCAS warranted additional training.
3) Fired QA staff / whistle-blowers for raising legitimate concerns.
4) Chose to not halt production to address safety concerns that had been raised.
I'm arguing that every one of those choices was ultimately made to maximize Boeing profits.
Certainly there are some situations where money can't magically fix a problem. But in my judgement this isn't one of them.
s1artibartfast 10 minutes ago [-]
I come at it more from the angle of quality culture. I have been in big companies and small ones, and my experience is that quality is a function of engineering culture and structure, not funding.
Similarly, very few companies intentionally cut corners and trade quality risk for profit. Instead, they become bad at understanding, managing, and communicating quality risk. It is a type of governance problem, but a much more nuanced one than simple greed. Afterall, quality is a tool to ensure profits. Instead, I think it often a story of bad hiring, botched policy changes, and slow decay of organizational competency. Often times, this is the direct result of trying to throw dumb money at a problem.
burkaman 2 hours ago [-]
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.
s1artibartfast 1 hours ago [-]
Negative reaction to stock BuyBacks are also emotional and irrational. I've never heard anyone articulate a cogent argument why they are worse than paying a dividend.
booi 2 hours ago [-]
You're not supposed to use the $10B to buy treasury bonds.. you're supposed to use it on R&D, manufacturing, QC, etc...
s1artibartfast 2 hours ago [-]
The parents said cash on hand.
You are proposing a third hypothetical. Would Boeing being a better position today if they had spent 10 billion dollars yesterday? Maybe, maybe not.
tylersmith 2 hours ago [-]
Who decided that's what they were supposed to do with it?
ihumanable 2 hours ago [-]
The fact that they are having to sell these shares to try to right the ship means the market decided. Otherwise they could just keep extracting as much profit as possible.
Oddly enough people that fly on planes want to be confident that the planes will work.
financetechbro 2 hours ago [-]
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.
bryanlarsen 36 minutes ago [-]
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.
LeifCarrotson 2 hours ago [-]
Misunderstood the finances, more likely. The difference between selling existing shares and creating new shares is complicated.
Rendered at 00:17:53 GMT+0000 (Coordinated Universal Time) with Vercel.
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.
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
Perhaps. But it is an excellent reason to sell a company - which Boeing is doing, by selling shares.
and selling $10B in shares will drive it down further
Investments by definition is a risk. If you want garunteed returns use a savings account or GIC.
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.
That is a metaphysical certitude.
"A good critical comment teaches us something."
https://news.ycombinator.com/newsguidelines.html
(p.s. not defending boeing - just hn thread quality)
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
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.
One of the big problems with Boeing is that they had two parallel quality systems with imperfect and overlapping reporting. I'm sure they could have spent twice as much and had four overlapping quality systems, but I'm not confident that would improve reliability opposed to reduce it.
If the solution to everything was money, companies like wework, quibi, or theranos would just need more investment.
Not everything is a money problem
I believe that in this particular situation, Boeing intentionally cut some safety corners to improve their profitability:
1) Pushed their airplane production rate so high that many of their workers didn't believe they were producing safe airplanes.
2) Took various steps to convince the FAA to allow the 737 MAX to fly with the same type rating as other 737s, despite it being pretty clear to outsiders that MCAS warranted additional training.
3) Fired QA staff / whistle-blowers for raising legitimate concerns.
4) Chose to not halt production to address safety concerns that had been raised.
I'm arguing that every one of those choices was ultimately made to maximize Boeing profits.
Certainly there are some situations where money can't magically fix a problem. But in my judgement this isn't one of them.
Similarly, very few companies intentionally cut corners and trade quality risk for profit. Instead, they become bad at understanding, managing, and communicating quality risk. It is a type of governance problem, but a much more nuanced one than simple greed. Afterall, quality is a tool to ensure profits. Instead, I think it often a story of bad hiring, botched policy changes, and slow decay of organizational competency. Often times, this is the direct result of trying to throw dumb money at a problem.
You are proposing a third hypothetical. Would Boeing being a better position today if they had spent 10 billion dollars yesterday? Maybe, maybe not.
Oddly enough people that fly on planes want to be confident that the planes will work.
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.