I think it is clear the Boeing is not a good quality company at this time, and the fact that they have a cash-flow problem is not encouraging, since it means they are one step away from bankruptcy restructuring.
If you have a company and you think it is overpriced, that means it's a good time to issue stock and convert share price to cash.
Tesla is one of the best examples of in history of companies doing this. They used the inelasticity of Tesla stock price to raise tens of billions of dollars in secondary stock offerings after their IPO
Perhaps. But it is an excellent reason to sell a company - which Boeing is doing, by selling shares.
and selling $10B in shares will drive it down further
Investments by definition is a risk. If you want garunteed returns use a savings account or GIC.
My intuition is yes -- Boeing is America's last / only major commercial aviation jet mfr. -- and I don't think Uncle Sam will let them fail. Economically, I disagree with such a policy, but there's no reason I shouldn't profit from it.
That is a metaphysical certitude.
"A good critical comment teaches us something."
https://news.ycombinator.com/newsguidelines.html
(p.s. not defending boeing - just hn thread quality)
Why keep the cash on hand when you can raise cash.
I get that people have an emotional reaction to Boeing, but it's not like owning 10 billion dollars of Treasury bonds would have prevented a door plug blowout
I doubt today's announcement is any kind of endorsement by the company about its past foolishness.
I think the assumption here is that, in the past, more money should have been dedicated to ensuring high airplane reliability instead of company profits. And if that had been done, the door plug blowout wouldn't have happened.
P.S.: I'll call it how I see it: it wasn't merely foolishness, it was evil. They prioritized their own profits over the public safety with which they were entrusted.
One of the big problems with Boeing is that they had two parallel quality systems with imperfect and overlapping reporting. I'm sure they could have spent twice as much and had four overlapping quality systems, but I'm not confident that would improve reliability opposed to reduce it.
If the solution to everything was money, companies like wework, quibi, or theranos would just need more investment.
Not everything is a money problem
I believe that in this particular situation, Boeing intentionally cut some safety corners to improve their profitability:
1) Pushed their airplane production rate so high that many of their workers didn't believe they were producing safe airplanes.
2) Took various steps to convince the FAA to allow the 737 MAX to fly with the same type rating as other 737s, despite it being pretty clear to outsiders that MCAS warranted additional training.
3) Fired QA staff / whistle-blowers for raising legitimate concerns.
4) Chose to not halt production to address safety concerns that had been raised.
I'm arguing that every one of those choices was ultimately made to maximize Boeing profits.
Certainly there are some situations where money can't magically fix a problem. But in my judgement this isn't one of them.
Similarly, very few companies intentionally cut corners and trade quality risk for profit. Instead, they become bad at understanding, managing, and communicating quality risk. It is a type of governance problem, but a much more nuanced one than simple greed. Afterall, quality is a tool to ensure profits. Instead, I think it often a story of bad hiring, botched policy changes, and slow decay of organizational competency. Often times, this is the direct result of trying to throw dumb money at a problem.
You are proposing a third hypothetical. Would Boeing being a better position today if they had spent 10 billion dollars yesterday? Maybe, maybe not.
Oddly enough people that fly on planes want to be confident that the planes will work.
I don't know whether they retired the stock they bought back or put them back into the treasury, but in practice it's basically the same thing. Shares are fungible.