Bombardier Inc. T.BBD.A

Debt reduction and dual ownership

[stockitnow]

First of, all division are doing well.  New orders are keeping backlog above 1.0, aircraft build rate is at or above set target and aftermarket sales is booming and growing each quarter.  The only negative and the one that matters the most is debt.  Until debt is reduced, Bombardier will be speculative buy.  Yes Bombardier is tracking better to their plan but they are still heavy on debt.

Dual ownership is also keeping institutional from buying.  Most institutions have their internal regulations preventing them from buying funds where their vote doesn't matter.  Think it from an institutional point of view.  If they invest their money or their clients money in a company then they trust that company to make the right decision.  If institutions dont agree with company decision then through enough support from board of directors the institutional can make changes based on their clients requirement.  This cant be done with Bombardier and it leaves institutional at mercy of Bombardier family decision making skills.  Institutions  can be liable if they took their clients money and invest in such companies where they dont control decision making.  Institutions can also be liable to their shareholders if they invest in companies where they have no control or say.  Its labeled as negligence.  

I am not posting this to debate if dual ownership is good or bad but why you shouldn't expect institutions from buying.   The big debt will also prevent institutions from buying.  Bombardier has negative net worth which is also good reason for institutions to stay away.

What Bombardier needs to do is pay down their debt every quarter.  Yes they dont have any debt/bond due but they need to pay of partial whatever whenever they can.  Bombardier owes.more then its worth as a company.  And that is why you will see no institutions buying and will see irrational sp movement.  For me this is speculative buy for big gain.  This is an endurance race not a sprint.

[Micmar]

If no double class shares there will be a agressif takeover in less than a week or a day.

[Shamhorish]

micmar, exactly, that is what will happen, mostly a USA or France  as they did with cseries and stole it from bbd, now air bus is bragging about owning best clean sheet singel isle jet! THE FAMOLY WILL NEVER DROP DUAL SHARE, UNDER ANY CONDITION BOMBARDIER BUS. JET WILL STAY AND SURVIVE AND SUCCEED AS A CANADIAN JEWEL

[stockitnow]

There is no rush.  Bombardier is worth less then what they owe in debt.  Who have takes over also takes on the debt. Its not worth it. Its the dual ownership that got Bombardier the big debt. Only one CEO/division president opposed building the c series and he left the company.  More likely shown the door.  We all now know c series and Learjet was a mistake to build all at

[clubhouse19]

  About institutiona; buying... You are correct on that note that it will not happen until it can be justified by growth and debt repayment.   Debt repayment will not be enough in the longrun if there is not a plan for grwoth attched to that event. I am sure Eric Martel is well aware of that.and is part of his future plans. .   With that in mind, the ludicrous daily short term

[Shamhorish]

SOME PEOPLE SAY ANY THING ABOUT ANY THING WITHOUT KNOWING A THING THE C SERIES WAS NOT A MISTAKE SIR THERE WAS A CONSIRACY TO STEEL IT SINCE DAY ONE  C SERIES WAS SUPPOSED TO BE READY AND TESTED IN 2015 FIRST CONSPIRACY ON FIRST FLIGHT PRAT$WHITNEY ENGIN CAUGHT FIRE (STRANGE IS NOT IT) SAME ENGINE WAS USED BY AIRBUS P&w TOOK ONE YEAR AND FEW MONTHES TO FIX THE PROBLEM THEN  C

[stockitnow]

All wrong.  Pratt engines was first selected by Mitsubishi.  Mitsubishi was slowly developing the MRJ and pratt was developing the GTF in Parallel with MRJ schedule.    Bombardier selected GTF after Mitsubishi and had more aggressive/shorter certification schedule to bring c series before MRJ.  Without the efficiency of GTF, c series would not have been competitive with

[ChrisM5527]

The "mistake" was management/ownership thinking that they could do all this alone without any government support.  And to commit the company down that path without that support.  Insane in hindsight.

[dreamer05]

The C series is not a mistake. In fact the Cseries was a sucess. It fls well in the air and achieves high praise from a few airlines and pilots. The only big mistakes was the  CEO Allain Lamare who gave it to Airbus for free, rubbing all the money of Shareholders. Until today I still wonder if Allain got the right to do that without the approvals from all shareholders. Why didn't he give

[clubhouse19]

The technology was certainly not a mistake but the plan to commercially make it viable was certainly a huge mistake.   They certainly came out to be totally naive without having any foresight of the hurdles that was to be put in front of them.    Don't matter how good your product is, they became too financially vulnerable and the vultures came calling. Do you blame the

[johnney]

I agree 100% with your post!

[stockitnow]

He got the approval from the Bombardier family.  No need to ask all the shareholders under the dual ownership structure. Alain is the one who got all the skeleton out of the closet.  PB for years hid all the loss from rail, dash 8, CRJ and accumulated huge debt from global/c series and Learjet development.  C series is a great airplane but a financial disaster.  Again PB did

[johnney]

Very good post, and agree 100% if what you mentioned, and it's more than a fact, their debts, own more than what itls worth, and institutions will stay away fir certain while, you do mark a very good point on this!

[Truthifest]

Plenty of institutions are not restricted from buying Bombardier's inferior voting rights B shares.  Simply look up institutional ownership of other companies' shares that have inferior voting rights.  GOOG, for example, which is the ticker for Alphabet's C shares, which have ZERO voting rights, is 61% owned by institutions, per the NASDAQ.  

[stockitnow]

What about their balance sheet and revenue and debt.  How many are in negative after paying debt?

[lb1temporary]

Many managers talked against dual class shares but will they pass by a good investment only for philosophical reasons ? Managers are looking for a strong niche, a good management and a good profit record . Peroid. Let the talkative managers do their talking, it's only words. 

[Truthifest]

There are a variety of reasons for institutions to avoid Bombardier's shares, such as the inferior voting rights of the B shares, the company's high leverage, the Canadian HQ location, the company's disappointing past, their biz concentration in a competitive cyclical industry, etc.  A prospective institutional investor can simply read the Risk Factors section of the 10-K to

[stockitnow]

Too funny.  They are not talking but in fact not buying.  Not a single institution analysts following and rating Bombardier are or have bought Bombardier.  Many in fact at time of rating declare that they dont hold any. So the question is why all this free upgrades/downgrades from these analysts.  Its simple its not for Bombardier but for other companies that are held by these

[lb1temporary]

Brookers analysts don't hold shares of Bombardier ...like any shares of others stock they follow. They are not allowed to. 

[stockitnow]

Correct.  All the analysts who you post about upgrading/downgrading have no skin in the game.  They are doing it for the benefit of other companies that their parent institution holds.  What does that tell you.  They are monitoring Bombardier for the benefit of their holdings elsewhere. 

[Truthifest]

Interesting differences evidently between the US and Canada.  For example, in the US, sell-side stk analysts and their families and employers can and do sometimes own shares of the companies they cover, they just have to disclose those. The point of their coverage is to attract investor $ to their firm and the stock, and to get investment banking business.  Never once in decades of

[bicente]

I agree , never thought about coverage of a stock being done for investors of another stock but I guess it could be related in some distant focus ... ther are particular reasons for lackj of interest in this stock that when added up it places us in the situation we are in ...family controlled , govt money injected for jobs, being in Canada( being in Quebec makes is worse ) , debt still considered

[johnney]

Shareholders have to be rewarded after all their past mistakes, hope so! GLTA!!

[stockitnow]

Now you have learned something new.  Follow Flexjet an netjet too, to see what the industry is doing and where the market is going.  Also Follow Bombardier competition as well as boeing and Airbus.  They all rely on same suppliers.  Supply chain can make or break a company.

[MyNameIsNobody]

Where do you get that info about them not being allowed to?  As far as I know securities trading laws are managed by each province, there's no federal institution regulating this.  I know of L'autorite des marches financiers in Quebec and the Financial services regulatory Auhority of Ontario. If my memory isn't failing me, I've seen quite a few articles on the web from

[lb1temporary]

It's a common sense rule. I'm not sure that the regulations are going so far but I'm sure that it's an internal rule for almost all the brookers. I don't have in mind a disclosure with a positive ownership. It's a credibility problem: If the analyst own shares on a stock he call a buy, what is his motives ? Pumping? On the opposite, if he call a sell; did he buy

[johnney]

Right!

[PabloLafortune]

Bombardier has too much debt. The rest is a red herring at best, conspriacy theories at worst. If you were to analyse 100 US/CDN companies with closest market cap to BBD, I'll bet Bombardier is in the 5% with most debt to operating cashflow. So of course most institutions being risk averse to known risks or politically incorrect risk won't touch it.  They don't mind taking big

[bicente]

yes debt is the major issue and thankfully it is getting addressed ... I believe that the family thought they could get more money for the platforms that were sold , I believe they were caught off guard and had to adjust quickly and pay high interst to stay afloat ...I think they are working out deals to get their financing even lower than it is now ,  making it easier to pay down more debt

[PabloLafortune]

As the debt goes down, the Enterprise Value will go up - less risk, more attractive to institutionals, less interest cost. Thats why I suggested convertible debenture issue before - less dilutive (as strike is quite a bit higher than SP), much lower rate than bonds. Even Amazon issued this back in the day (2002?). If only the govt would guarantee the buyers' deposits.

[glory7]

Easier to bankrupt the debt and start over, away ahead? Not gonna be easy sailing. Of course the knitting Club will pump suckers.

[bicente]

if the family wanted to do the same as AirCanada by going bankrupt they would have done so a long time ago ( while runing away with the cash ) so I don't understand why you bring it up .....then again , I just noticed YOU posted it so it makes sense ... always late to the party , and wondering where everybody went ... don't you ever get tired of being wrong ? ...GLTA  

[glory7]

Wimpy you gotta be kidding,buck many days not greedy, no shares.

[bicente]

Have you ever completed a full sentence , punctuation included ? ... ignorance is bliss I guess ... bet pennies earn pennies ... GLTA