Boeing might sell billions worth of new stock as it runs short on cash
Boeing (BA) is weighing selling new stock in an effort to boost its balance sheet.
Bloomberg, citing unnamed sources familiar with the matter, reports that the Virginia-based aerospace giant is considering selling roughly $10 billion worth of new stock to raise cash.
The plane maker has had a tough year, ever since a door plug blew out on a 737 Max 9 jet in January, inviting ongoing scrutiny and a Federal Aviation Administration production cap on its best-selling aircraft.
The stock sale isn’t expected to happen for another month, Bloomberg reports, and it depends on whether Boeing can end a strike that saw some 33,000 Boeing machinists walk off the job last month. That labor action is losing Boeing about $50 million per day, and is so big that researchers say it could even put a dent in Friday’s jobs report.
Despite being one of the largest U.S. manufacturers, Boeing doesn’t have a lot of extra cash. Against $77.8 billion in revenue last year, according to its annual report, it spent $70.1 billion on the materials to build planes and the people who do the building — including the machinists.
In the second quarter, Boeing reported negative free cash flow of more than $4 billion and a diluted loss per share of $2.90.
Boeing stock is down almost 40% so far this year, for a market capitalization of $93.2 billion. Shares closed out Monday down 2.74%, for a per-share price of $152.04, and were down less than 1% in pre-market trading Tuesday.
Chief finance officer Brian West said at a conference in mid-September that the strike “will impact production and deliveries and operations and will jeopardize our recovery.”
The company has been scrambling to get its finances — and reputation — righted. In July, Boeing tapped Robert “Kelly” Ortberg as its new chief executive, an industry veteran who is tasked with turning around the embattled aircraft maker.
