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· Posted on
October 18, 2024

Boeing suffers from major turbulence but now looks to raise $25 billion to get its wings back

Boeing is looking to raise as much as $25 billion USD through a mix of bonds and shares after facing several challenges.

What's the key learning?

  • Boeing had been supplying commercial airplanes for decades worldwide.
  • This means, Boeing’s collapse could and would have enormous consequences for the broader economy globally — if this ever happens.
  • But, when you're too big to fail, you might just find that people are willing to go the extra mile to help you out.

👉 Background: Boeing was founded in 1916 and has become one of the largest aerospace manufacturers in the world, with more than 10,000 Boeing-built commercial jetliners in service worldwide.

👉 What happened: Now, Boeing is looking to raise as much as $25 billion USD through a mix of bonds and shares after struggling with:

  • Slower production of its planes stopped due to employee strikes
  • Delays in the delivery of planes which were supposed to be delivered in 2019, but instead will be in 2026

👉 What else: With these struggles, it’s no surprise that Boeing's stock has lost more than 40 per cent in value this year. Despite these challenges, Boeing is confident it will raise the cash to survive... and maybe even thrive.

What's the key learning?

💡In the world of business and finance, some companies are considered "too big to fail”. This occurs particularly industries critical to national security and infrastructure, like aerospace and aviation.

💡 When companies in critical industries face challenges, investors often step in to help keep things afloat because the consequences for the broader economy could be catastrophic. For example, Boeing currently has 6,000 planes on order to airlines around the world.

💡This ain’t the first company that has been too big to fail. The US government has bailed out banks during the 2008 GFC like JP Morgan, and Wells Fargo. They also bailed out car manufacturers like GM and Chrysler to save enormous job losses.

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