Close: Boeing short +44%; 93%-pts better than S&P short 2 March 2022
Closing three-year short idea on Boeing for gross gain of +44.4%. Incredibly, this was almost as good as going long the S&P 500 over the same period as it gained 49%.
Boeing price at 4.10.2019 post: $365/shr.
Price at close on 3.1.22: $194.91/shr.
Cummulative dividends during time period: $8.22 /shr gives adjusted price: $203.13
Gross gain on the short of +44.4%. Meanwhile the S&P 500 increased 49% from 2888 to 4306 between the same dates. So the Boeing short outperformed an S&P short by 93.4 %-pts.
This has to be one of the best performing short ideas of any company of such large market valuation during this time period. Original post is included below since stockhouse seems to cut off posts over a year old:
https://stockhouse.com/members/investmentitos/bullboard-post-history/
April 10, 2019 - 11:13 AM
152 Reads
Post# 29606974
40 second Russian Roulette
Short Boeing BA $365/shr
Who wants to get on a plane where presumably at any time (I assume only during takeoff) a computer system that is needed to ensure the plane is flyable could malfunction, and the piliots will have 40 SECONDS to react properly or else the plane will become unrecoverable and fly straight down into the ground? How many people in the room are raising their hands?
Didn't bother to mention that in the flight manual eh? Or did they say it was in the fine print or something.
My point here is that the design change in the MAX made the plane unstable enough that it required this new MCAS system. But if MCAS misfires, which we know it can, then the plane could crash in 40 seconds unless the pilots react exactly as required.
How can Boeing engineers *guarantee* the MCAS system won't misfire? Seems to me "guarantee" is impossible. And if they can't guarantee this, then the MAX can't fly as currently designed, except maybe a cargo carriers.
Therefore, I'm waiting for the announcement of a redesign of the MAX by Boeing, and a recall by Boeing to retrofit the engines on all existing MAX planes. Would this make the stock fall?
THe top owners of BA are not exactly the "smart" money - Vanguard at 7.5% etc. Since dumb money ETFs don't sell on news or fundamentals, it explains why BA is still floating at levels from 2019 and kept pace with the S&P 500 still.
If you'd asked me after the Lionair crash where BA shares would be today if you'd told me what was going to happen, I'd say like geez maybe $200 at most, maybe alot lower even.
This reminds of PG&E: in hindsight it was obvious PG&E was gonna have a day of reckoning because they were causing fires that were buring down villiages and killing people, even if PG&E is victim of climate change and could claim force majeur or something, its hard to rationalize blame in America. With Boeing its MCAS. Don't see how you can safely fly a plane with MCAS on it.
BA seems like a one way trade - even if the shares don't go down as much as expected its really hard to imagine BA is worth what it was pre-MAX-disast. At least its gotta be pushing further out those earnings that CFAs like to discount back to the present so they can justify their ideas in weekly presentations; and maybe require a bit higher discount rate to justify that higher risk at BA.