Good day all. Next week, (October 23rd), Boeing will be releasing their earnings report. This might be a good time to short Boeing stock if you are an investor. Thanks to the 737 MAX fiasco, I have a sneaking suspicion that Boeing’s numbers aren’t going to be all that good.
Now, I have no inside information, (That would be very illegal), and I have no financial interest in Boeing, nor do I plan to anytime soon. However, for those of you who are investors and understand things like shorting stock, Monday and Tuesday this week might be a very interesting from a shareholder’s perspective. To begin with the Board of Directors and the company bigwigs will be meeting, no doubt to discuss their impending doom. Here are some details from Fox Business:
Boeing’s board of directors and head executives were slated to meet in San Antonio, Texas, on Sunday and Monday ahead of the company’s earnings report, according to Reuters. The earnings report is due out Oct. 23.
I wonder why they are in Texas? I thought Boeing Headquarters were in Chicago? Perhaps it’s so they can make a run for the border ahead of the angry shareholders and their torches and pitchforks?
The meeting comes after a report that Boeing may have been hiding issues with the 737 Max for years.
Internal messages from 2016 between Boeing employees suggest the aircraft maker may have misled the Federal Aviation Administration about a Boeing 737 Max safety system, Reuters reported, citing sources briefed on the matter.
Now for a little background. The 737 airframe has been in production for about 50 years. It’s basically a good, solid design. It’s also a bit long in the tooth as designs go. Boeing has been updating the design for decades, but the 737 MAX was a major change. Due to the regulations and laws, rather then being considered a brand new design, and tested as such, it was treated as an upgrade like all the previous versions.
Also, there were some cost cutting measures used that, on reflection, were flat out idiotic. Boeing used to have a top line in house design team. They had decades of experience. They were also very expensive, so the bean counters decided to outsource the computer software design and coding to a company in India that had no experience in this type of work at all. It turned out there were some issues with the control software and that caused two planes to crash.
The 737 Max, Boeing’s best-selling model in its history, was grounded in March after two crashes killed more than 300 people. Regulators demanded the planemaker devise a patch to prevent the software from acting on erroneous data and attempting to lower a plane’s angle of attack during takeoff.
As I understand it, the computer software would decide the plane was going to stall. The first thing you do in that situation is push the nose of the plane down to either level flight or a slight dive to build up air speed. That doesn’t work to well when you are low to the ground and are in level flight to begin with.
Because of this mess, all 737 MAX’s have been grounded, planes that have been completed aren’t being delivered, and it isn’t beyond the realm of possibility that Boeing, if they can’t fix the computers, may have to scrap the entire line, including buying back planes already sold. (I can’t say if this can or would be done. From a layman’s perspective, it does make sense)
Whatever is going to happen Wednesday, it’s not going to be very good for the earnings reports, and that means it won’t be good for the stock price. What a pity I don’t have the resources or the time to play the market with Boeing stock.
Thatisall
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