What's Going On With Boeing Stock Monday?

Boeing Co BA shares are moving lower Monday morning. The company launched an offering to raise up to $19 billion.

What Happened: Boeing on Monday announced concurrent separate underwritten public offerings of 90 million shares of common stock and $5 billion in mandatory convertible preferred stock. Based on Friday’s close of $155.01, the common stock offering could raise close to $14 billion.

Boeing said it would grant the underwriters a 30-day option to buy up to 13.5 million additional shares as well as $750 million in additional convertible stock.

The news comes as Boeing battles continued headwinds from an ongoing machinists strike that has reportedly been costing the company roughly $100 million per day. Rating agencies have also warned that the strike could lead to a downgrade of Boeing’s credit rating, per Reuters.

“The offering is certainly favorable for credit quality. We’ll factor it into our assessment of the rating in the context of continued negative free cash flow,” said Ben Tsocanos, aerospace director at S&P Global Ratings.

Boeing has halted production of several of its plane models in response to the strikes, including the 737 MAX. The planemaker was already under pressure from regulators related to a mid-air panel blowout incident from January.

See Also: Boeing’s Options: A Look at What the Big Money is Thinking

The labor troubles combined with production problems have led to a significant cash burn in 2024. Boeing had $10.5 billion in cash, cash equivalents and marketable securities as of Sept. 30. Last week, Boeing reported a loss of $10.44 per share and said it will continue to burn cash in 2025.

“It will take time to return Boeing to its former legacy, but with the right focus and culture, we can be an iconic company and aerospace leader once again,” said Kelly Ortberg, president and CEO of Boeing.

“Going forward, we will be focused on fundamentally changing the culture, stabilizing the business, and improving program execution, while setting the foundation for the future of Boeing.” 

Boeing on Monday said it plans to use any proceeds from the offering for general corporate purposes, which may include repayment of debt.

BA Price Action: Boeing shares were down 1.23% at $153.09 at the time of publication, according to Benzinga Pro.

Photo: courtesy of Boeing.