Did Boeing Shares Drop After Max 737 Crisis?

Leia Smith | 02 - 03 - 2020
Did Boeing Shares Drop After Max 737 Crisis

While it is still unsure if Boeing will ever recover from the 737 Max crisis and public scrutiny, the American multi-national airplane manufacturer has been losing money like never before. After 2 deadly crashes that killed 346 people in Indonesia and Ethiopia, aircraft regulators around the globe including FAA ordered the immediate grounding of the plane’s model. The U.S was the last country to ground the 737 Max after tension grew surrounding the MCAS (Maneuvering Characteristics Augmentation System) flaw that caused the doomed planes to enter into a nose-dive. 

What Is Boeing’s Current Share Price?

Dennis Muilenberg, Boeing’s CEO at the time of the crash, was recently ousted by the board because of his inefficacy to handle the MAX issue. The revenue from the company’s commercial airline unit stumbled down by 67% as it delivered a mere 380 jets in 2019 compared to 806 deliveries in 2018. This has made the share prices drop to $318.27 in 2020. 

What Led to the Drop-in Stock Price?

Though the MAX jets were grounded back in March 2019, the manufacturing unit kept operating until later that year until Dennis officially declared that Boeing will currently keep the production on halt. This decision came after the grounding unexpectedly extended into 2020. Last year, the Chicago based manufacturer had to settle billions in compensation to the families of the victims. Apart from this, the delay of the MAX jets back to service also made the airline customers around the world claim for compensation for the period of grounding. All this added to Boeing being not able to financially support its suppliers for continued manufacturing. The release of internal conversations between the employees regarding the safety of 737 Max further added to the burning turmoil. 

1. Which Boeing Aircraft Model Was Involved in Two Fatal Crashes?
  • A. Boeing 747
  • B. Boeing 787
  • C. Boeing 737
  • D. Boeing 777

Is It Good to Buy Boeing Shares Now?

It might take years or even decades for Boeing to earn back its lost trust. While some financial experts suggest that this might not be the best time to buy shares, a few others recommend buying them now as once the planes are ungrounded, the share value might go up. So, make sure you analyze the market well before investing.    

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