←back to thread

32 points bookofjoe | 1 comments | | HN request time: 0.263s | source
Show context
xracy ◴[] No.41853512[source]
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.
replies(4): >>41853520 #>>41853701 #>>41853813 #>>41853870 #
financetechbro ◴[] No.41853813[source]
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.
replies(3): >>41853862 #>>41854236 #>>41862684 #
1. xracy ◴[] No.41862684[source]
I think you misunderstand my comment.

Boeing has famously done stock buybacks of $43 Billion for the period of 2013-2019. Now they need to raise $10 Billion in cash. Whether they're doing that by issuing new stock or by selling bought stock is moot.

They converted $43 Billion dollars into stock (probably more since then, but let's make the point), raising their market cap from $57B in 2013 to $93B today. Which is a difference of $36B[1]. So they converted $43B in 2013 into $36B in 2024. It's worse than that, because if you account for inflation since 2019, The $36B is actually only equivalent to $28.8B [2] of the dollars that they spent on it.

This means, that in the period from 2013-2019 Boeing lost ~$14B in cash by spending it on stock buybacks.

My comment here is just that. They converted $43B cash (probably more) into $29B stock value. And now they need $10B cash. For which they will issue new stock, and likely tank the stock value even more. I would be surprised if there's enough float that they wouldn't just destroy the stock value entirely by trying to issue ($10B/154($/stk)) == 64M Stock. Their average volume (I assume float) is 9M according to Google stock, but they also say 20+M for the past few years. So I'm guessing we could see Boeing stock drop by half for this round of sales.

[1] https://www.macrotrends.net/stocks/charts/BA/boeing/market-c... [2] https://data.bls.gov/cgi-bin/cpicalc.pl?cost1=36%2C000.00&ye...