3 ms·
The only commonality is these are both scandals and probably cover-ups - and generally negative headlines for both companies. The difference is there's been a s
by anonu 8y ago
The only commonality is these are both scandals and probably cover-ups - and generally negative headlines for both companies. The difference is there's been a significant death toll in the case of BA. You can argue the same for diesel emissions - but not really along the same dimension. ie: people dying of lung cancer vs people dying in a plane crash..
If you wanted to find the "fair value" price of BA you have to discount its future cash flows to the present. If BA planes are perceived as unsafe - what does this mean for future purchase orders? Does Airbus edge up ahead over time? Do people diversify their fleet with the new China-made jetliners?
From today's perspective, the stock is still in the middle of a crisis that is unfolding. It is impossible to know how much further down it will go as new data-points are revealed. How long will a fix take? Have commercial jetliners ever been recalled en masse?
Short-term trades are more fun than fundamental positioning, in this case, IMHO. Betting on continued high volatility via the options market is probably the safest way to go - as opposed to betting on directionality of the stock. Timing is everything. Happy trading...
- dlgeek 8y ago> Have commercial jetliners ever been recalled en masse? Yes, all the time. They're called "airworthiness directives" and you can find them all here: https://www.faa.gov/regulations_policies/airworthiness_directives/ https://www.faa.gov/regulations_policies/airworthiness_direc... They're basically like car recalls: You take the plane to maintenance and they swap out the bad doodad. Boeing had a very public one like this with the 787 batteries when it first launched; they made some changes and now it's an incredibly popular plane. But in general, they're happening all the time for basically every plane, just not catching much public attention.