Boeing's (BA, Financial) latest $19 billion fundraising push signals a hard pivot to solidify its financial footing, keeping operations steady as it faces a wave of cash needs. The capital raise includes $14 billion from 90 million common shares and another $5 billion through newly issued preferred stock. Analysts, expecting something closer to $15 billion, see this raise as Boeing's immediate response to major upcoming debts and cash burn amid an industry-stalling machinist strike. The strike's sixth week and recent $6 billion quarterly loss underscore why Boeing's leadership is doubling down on liquidity to navigate this volatile phase.
The preferred stock, convertible by 2027, gives investors an attractive option to buy in, keeping long-term funding flexible as Boeing preps for near-term debt deadlines and a gradual return to full production. Plans to divest its space-exploration segment and United Launch Alliance (jointly owned with Lockheed Martin) could further pad its balance sheet, helping offset risks tied to potential credit downgrades and higher borrowing costs. For investors, Boeing's playbook right now is about keeping its investment-grade rating intact and restoring operational capacity—starting with paying down debt.
New CEO Kelly Ortberg isn't shying away from the challenges. He's framing this strategic cash move as the start of Boeing's comeback journey, emphasizing resilience and a focus on “iconic” industry leadership. While dilution may not thrill shareholders, the strategy indicates Boeing's commitment to fight through its financial storm.
