Boeing's $19 Billion Share Sale: A Money Move to Stay in the Game

Boeing has been dealing with a tough time for years now. Two plane crashes and a pandemic later, the company is looking to boost its finances. So, they've just announced a plan to sell some of their shares worth about $19 billion. This isn't their first big money move, as they've already raised $25 billion in debt and agreed to a $10 billion credit facility. But why all this cash talk? Well, Boeing wants to keep its credit rating from dropping to junk. They're also dealing with a labor union strike that's costing them a lot. The company plans to sell around 90 million common shares, which would be about $14 billion based on their current stock price. On top of that, they'll sell another $5 billion in securities that can be swapped for preferred shares. Where will this money go? Boeing says it's for general corporate purposes.

Boeing has been burning cash this year, using up $10 billion in the first nine months alone. They had to slow down their manufacturing to fix some quality issues, and a strike by 33, 000 workers in September didn't help either. The company's chief financial officer has been saying since summer that they want to protect their investment-grade credit rating. Selling shares is a big step to tackle this crisis, but will it be enough? Experts are watching how fast Boeing can deliver their commercial jets, as that's key to keeping their credit rating. Jefferies' Siddhartha Sandilya thinks the share sale will be well-received, but only time will tell if it's enough to keep Boeing in the clear.

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