Boeing Co. BA is contemplating raising at least $10 billion by issuing new stock to replenish its cash reserves.
The aerospace giant’s stock dipped approximately 1% following the news. Shares were trading at $150.65 during pre-market hours on Tuesday, down from Monday's close of $152.04, as per Benzinga Pro.
As per Bloomberg, Boeing is reportedly collaborating with advisers to evaluate its options. The equity raise is not expected to occur for at least a month, contingent on resolving the ongoing strike involving 33,000 workers.
The company aims to fully understand the financial impact of the strike before proceeding with the stock sale, according to sources familiar with the matter who requested anonymity.
Boeing has yet to respond to Benzinga’s queries.
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Why It Matters: The decision to raise funds comes at a critical time for Boeing. The company is grappling with a strike by 33,000 machinists who recently rejected a labor offer, raising concerns over potential operational disruptions and prolonged negotiations. This strike has already impacted Boeing’s stock.
Adding to Boeing's challenges, the U.S. National Transportation Safety Board (NTSB) has issued urgent safety recommendations regarding the rudder control system on Boeing 737 airplanes. The NTSB highlighted that over 40 foreign operators might be using these aircraft with rudder control components that could pose safety risks. This follows a February incident involving a United Airlines flight and similar issues experienced by two foreign operators in 2019.
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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