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Boeing stock feels like a great buy if the bottom falls out. There is simply no way the US Government is going to let the only major domestic commercial aircraf

Boeing stock feels like a great buy if the bottom falls out. There is simply no way the US Government is going to let the only major domestic commercial aircraft business go under. On the other hand this fiasco has not really hurt the stock price too much so perhaps investors already have decided this is true as well.

starpilot 7y ago
Yeah, this seems like it could be a great buying opportunity. Reminds me of Toyota's unintended acceleration debacle which led to the largest auto recall in history. Very similar emotional feel. I had a coworker saying she would never ride in a Toyota again. How's Toyota doing today? Just fine.
- aggie 7y ago
  Not sure how widely this is known, and thus how much it impacted stock prices, but the unintended acceleration panic was not a real mechanical issue, and thus Toyota was not at fault [1]. The 737 Max is/was a real problem and is/was Boeing's fault. 1 - https://en.wikipedia.org/wiki/Sudden_unintended_acceleration#Sudden_acceleration_in_Toyota_vehicles https://en.wikipedia.org/wiki/Sudden_unintended_acceleration...
  - Redoubts 7y ago
    > the unintended acceleration panic was not a real mechanical issue Wasn't it software? Isn't that just as "real"? > Toyota was not at fault Uh... A subsequent investigation[47] by Safety Research[48] of the NTHSA/NASA report along with information from Barrs report[49] and Koopmans report[50] revealed that bad software design, antiquated ECU hardware fueled by a poor company culture were the likely cause of the SUA in the Toyota Camry incidents. In April 2013, Betsy Benjaminson, a freelance translator working for Toyota to translate internal documents, released a personal statement about Toyota covering up facts about the sudden unintended acceleration problem. This leak of internal documents fueled a criminal investigation by the FBI and the Justice Department that had been ongoing since 2010,[52] and on March 19, 2014, the DOJ issued a deferred prosecution agreement with a $1.2 billion criminal penalty for issuing misleading and deceptive statements to its consumers and federal regulators, as well as hiding another cause of unintended acceleration, the sticky pedal, from the NHTSA.[41] This fine was separate from the $1.2 billion settlement of a class action suit paid to the drivers of Toyota cars who claimed that their cars had lost value as a result of the SUA problems gaining publicity in 2012, and was at the time the largest criminal fine against an automaker in US history.[53] Toyota was also forced to pay a total of $66.2 million in fines to the Department of Transportation for failing to handle recalls properly and $25.5 million to Toyota shareholders whose stock lost value due to recalls. Nearly 400 wrongful-death and personal injury cases were also privately settled by Toyota as a result of unintended acceleration.[53]
enraged_camel 7y ago
>> There is simply no way the US Government is going to let the only major domestic commercial aircraft business go under. The problem is this knowledge is built into the share price. In other words, the bottom would fall out only if the government started giving signals that it would in fact be willing to let Boeing fail. Still, bailing out Boeing would be extremely costly, not because of the bailout itself, but because the WTO prohibits government subsidies of aerospace industries in Europe and US. So the resulting punitive tariffs from Europe would hurt a ton.
- dragonwriter 7y ago
  > The problem is this knowledge is built into the share price. In other words, the bottom would fall out only if the government started giving signals that it would in fact be willing to let Boeing fail. Well, yes and no: knowledge of bailouts is built in to share price, but that knowledge includes the fact that while government stops important corporations from failing, those bailouts usually don't work to the benefit of pre-bailout shareholders very much (though they are sometimes better for them than standard bankruptcy would be); they are essentially special case bankruptcies, often with partial temporary nationalization.
rhino369 7y ago
Sure, but the government would likely allow it to go through chapter 11 restructuring, which could wipe out all equity holders. American Airlines still exists, but all the previous stock was voided during bankruptcy.
linuxftw 7y ago
Did you see how the GM bailout worked? The company was restructured, existing shareholders got nothing, new shares were issued. Shareholders are last in a long line during bankruptcy, this is pretty terrible advice.

starpilot 7y ago

Yeah, this seems like it could be a great buying opportunity. Reminds me of Toyota's unintended acceleration debacle which led to the largest auto recall in history. Very similar emotional feel. I had a coworker saying she would never ride in a Toyota again. How's Toyota doing today? Just fine.

aggie 7y ago
Not sure how widely this is known, and thus how much it impacted stock prices, but the unintended acceleration panic was not a real mechanical issue, and thus Toyota was not at fault [1]. The 737 Max is/was a real problem and is/was Boeing's fault. 1 - https://en.wikipedia.org/wiki/Sudden_unintended_acceleration#Sudden_acceleration_in_Toyota_vehicles https://en.wikipedia.org/wiki/Sudden_unintended_acceleration...
- Redoubts 7y ago
  > the unintended acceleration panic was not a real mechanical issue Wasn't it software? Isn't that just as "real"? > Toyota was not at fault Uh... A subsequent investigation[47] by Safety Research[48] of the NTHSA/NASA report along with information from Barrs report[49] and Koopmans report[50] revealed that bad software design, antiquated ECU hardware fueled by a poor company culture were the likely cause of the SUA in the Toyota Camry incidents. In April 2013, Betsy Benjaminson, a freelance translator working for Toyota to translate internal documents, released a personal statement about Toyota covering up facts about the sudden unintended acceleration problem. This leak of internal documents fueled a criminal investigation by the FBI and the Justice Department that had been ongoing since 2010,[52] and on March 19, 2014, the DOJ issued a deferred prosecution agreement with a $1.2 billion criminal penalty for issuing misleading and deceptive statements to its consumers and federal regulators, as well as hiding another cause of unintended acceleration, the sticky pedal, from the NHTSA.[41] This fine was separate from the $1.2 billion settlement of a class action suit paid to the drivers of Toyota cars who claimed that their cars had lost value as a result of the SUA problems gaining publicity in 2012, and was at the time the largest criminal fine against an automaker in US history.[53] Toyota was also forced to pay a total of $66.2 million in fines to the Department of Transportation for failing to handle recalls properly and $25.5 million to Toyota shareholders whose stock lost value due to recalls. Nearly 400 wrongful-death and personal injury cases were also privately settled by Toyota as a result of unintended acceleration.[53]

enraged_camel 7y ago

>> There is simply no way the US Government is going to let the only major domestic commercial aircraft business go under. The problem is this knowledge is built into the share price. In other words, the bottom would fall out only if the government started giving signals that it would in fact be willing to let Boeing fail. Still, bailing out Boeing would be extremely costly, not because of the bailout itself, but because the WTO prohibits government subsidies of aerospace industries in Europe and US. So the resulting punitive tariffs from Europe would hurt a ton.

dragonwriter 7y ago
> The problem is this knowledge is built into the share price. In other words, the bottom would fall out only if the government started giving signals that it would in fact be willing to let Boeing fail. Well, yes and no: knowledge of bailouts is built in to share price, but that knowledge includes the fact that while government stops important corporations from failing, those bailouts usually don't work to the benefit of pre-bailout shareholders very much (though they are sometimes better for them than standard bankruptcy would be); they are essentially special case bankruptcies, often with partial temporary nationalization.

rhino369 7y ago

Sure, but the government would likely allow it to go through chapter 11 restructuring, which could wipe out all equity holders. American Airlines still exists, but all the previous stock was voided during bankruptcy.

linuxftw 7y ago

Did you see how the GM bailout worked? The company was restructured, existing shareholders got nothing, new shares were issued. Shareholders are last in a long line during bankruptcy, this is pretty terrible advice.