for Boeing please focus in the following If you had $20,000 to invest, would you invest...

for Boeing please focus in the following

If you had $20,000 to invest, would you invest it is this firm?
Why or why not? (Discuss this in relation to Boeing. Do not offer alternative investment areas.)

Expert Solution

a. Boeing is a multinational corporation based in America. The company is one of the largest aerospace manufacturer and defense contractor globally. The company product portfolio includes commercial aircraft, military aircraft, space satellites and launchers, etc.

Now, it is a hard time for everyone. Many smaller industries will go out of business. Survival ability of even larger industries are a major cause of concern.

Travel restriction to mitigate the spread of Coronavirus recently has grounded airlines all across the world. This has resulted in the decline of share prices of airlines and airlines manufactures globally. Many are wondering whether this is a good time to invest by buying the discounted shares.

These are the hard times and someone would not have invested $ 20,000, if they had in Boeing.

b. Coronavirus pandemic has impact airline industries very hard. Smaller airlines will go out of business due to debts and frozen revenue. Survival ability of even major airlines are a major cause of concern.

Naturally, Boeing will also not be isolated with this shutdown, with a heavy loss of revenue already due to this pandemic.

Even before pandemic Boeing was having a tough time. Its major product 737 MAX, was grounded since last one year following pair of deadly crashes tarnishing its reputation. The 787 Dreamliner drop in production has not helped the company either.

Boeing expect 737 MAX to get the flying permit again in coming couple of months, with the company having over thousand units of active orders. However, significant amount of order cancellation and deferrals are likely due to effect of Coronavirus in airlines industry.

Its upcoming commercial plane 777X will not be ready for the market likely soon.

Due to Coronavirus, the company is struggling with declining demand and seeking financial assistance from the government. The company seek the assistance for payment and maintaining the health of its supply chain.

The share of Boeing has hit a record low recently. But with some airline industry going out of business, the share price of Boeing could drop even further. The company has also suspended its divident and with bleak future ahead, it does not seem a best strategy to invest in Boeing.

Though the company is not likely to go out of business, short term survival is really going to be tough. Airline industry will remain in pressure for a long time.

keosha answered 6 months ago

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