Market Data 
As an investor who particularly dislikes losing money, I primarily invest in shares but sometimes engage in short selling where I see an opportunity. A less familiar strategy. Short selling involves borrowing shares to sell at the current price, aiming to buy them back cheaper later. If the share price drops, I profit from the difference after returning the borrowed shares. Conversely, a price increase means a loss. I’ve been short Boeing
BA
There are several reasons why I am short the stock that I will go into, but as an experienced investor, I’ve seen a lot of good and bad things happen in the investing world. General Electric’s
GE
When we look at Boeing’s current problems, this story serves as a stark warning of what not to do. The problems with the 737 MAX and the pandemic struck a heavy blow. It’s hard to miss the similarities between GE’s past and Boeing’s present. They show how important two things are for any business, and by extension, any investor: being able to change your strategy quickly and well and being able to handle risks well. Blackberry was another company that fell onto this track, albeit in a different industry, and incidentally never recovered.
GE almost failed because it stuck to old tactics and didn’t change with the times in a market that was changing quickly. Their efforts to diversify were ambitious, but they didn’t have a clear goal, which led to them being spread too thin. The hard truth is that past success doesn’t mean future success. Like buyers, businesses need to constantly look at their methods and make changes as needed.
The Boeing Parallel
What is happening at Boeing echoes these concerns. The 737 MAX crash showed that their development and certification methods might have been flawed. The pandemic made these problems even worse by messing up supply lines and lowering the number of people who wanted to travel. Even though Boeing is still a strong company, their recent problems show how important it is to be able to change.
GE’s journey into financial trouble was a result of excessive development in industries such as financial services, specifically through GE Capital. This division experienced significant losses during the 2008 financial crisis. The corporation had instability due to leadership issues, particularly during the transfer from Jack Welch to Jeff Immelt, which resulted in unsuccessful strategy adjustments. During Immelt’s tenure, notable acquisitions such as Alstom’s power division were made, although they failed to meet the anticipated financial outcomes. Furthermore, GE was compelled to reassess its extensive operations due to competition from agile startups and established companies in digital technologies.
As an investor with years in the game, Boeing’s scenario strikes a familiar chord with turbulence. The tragic accidents that plagued the 737 MAX ordeal have seriously harmed Boeing’s financial situation and damaged its reputation. The ensuing obligations to settle with airlines and victims’ families only deepened the financial quagmire, piling on the debt. Then, as if on cue, COVID-19 decimated global air travel, further eroding demand for Boeing’s aircraft, and adding layers to an already complex recovery puzzle. This confluence of crises places Boeing in a particularly precarious position.
Similarities between the 2008 financial crisis and General Electric’s (GE) venture into financial services and Boeing’s current turmoil show that both companies are susceptible to hazards unique to their respective industries and to changes in the market. Leadership changes at both organizations made it difficult to adjust tactics to new conditions. Boeing’s 737 MAX problems and the effects of the pandemic highlight the importance of risk management and adaptability, while General Electric’s forays into non-core areas demonstrate the same. These examples show how important they are to the American economy and how strategic mistakes may have far-reaching effects on their bottom lines and the economy.
Possible Outcomes
Considering Boeing’s situation through the lens of an experienced investor, the company’s potential paths forward are pivotal. Given the historical context of GE’s near-collapse and recovery, Boeing might explore similar strategies like seeking government assistance, which could provide crucial liquidity. Restructuring plans may involve refocusing on core competencies and shedding non-performing units, akin to GE’s spinoffs under Larry Culp’s leadership. Boeing’s substantial order backlog, valued at billions, remains a critical asset, offering a foundation for stability and future growth. This backlog could be leveraged to reassure stakeholders and attract investment. Successful navigation through these strategies could see Boeing stabilizing and eventually thriving, despite current adversities.
An investor may think twice about purchasing Boeing shares because of the persistent uncertainty that could cause the price to fall even more. Problems have become much more apparent in the wake of the 737 MAX incident and the pandemic’s effect on demand for air travel. Excessive debt levels and the need for strategic reorganization exacerbate this gloomy forecast. Overcoming such obstacles takes time, according to business recovery history, and Boeing’s future is uncertain, which could impact stock performance in the near to medium term.
Reflecting on the journey and challenges faced by General Electric and comparing them to the current situation at Boeing offers valuable insights. Both companies have encountered significant hurdles due to strategic misalignments, leadership changes, and market dynamics. For Boeing, navigating these challenges may involve exploring avenues such as government assistance, strategic restructuring, and leveraging its substantial order backlog to stabilize and eventually thrive despite current adversities. These strategies could potentially mirror the steps taken by GE, emphasizing the importance of adaptability and strategic focus in overcoming crises and securing future growth. The trouble is that its not happening yet.
