Boeing Shares Halted Pending News

https://twitter.com/cheddar/status/1219701109108899843

by tempsy • 7 years ago

47 36 7 years ago

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tempsy4• 7 years ago

I don't think a Dow component has ever been halted before, so this is highly unusual.

Shares crashed more than 5.5% in the 30m or so before it was halted.

londons_explore• 7 years ago

I hope everyone who sold in those 30 minutes has a good non-insider-trading story.

Stock markets seem full of insider traders who are rarely punished, and who keep people like me from investing.

Macha• 7 years ago

From the video: The FAA have already announced it may be June/July before the 737 can be reapproved, and the previous guidance was April/May. That's the news that caused the initial drop, but apparently there's further news to come that caused the halt.

EDIT: Apparently the further news was just Boeing's confirmation of the above.

ceejayoz• 7 years ago

https://investorplace.com/2019/10/merck-and-pfizer-boosted-t...

Shares of Johnson & Johnson (NYSE:JNJ) were halted in late trading pending release of news. The news turned out to be that Johnson and Johnson said it found no asbestos in the baby powder it recalled. JNJ was trading slightly lower prior to the trading stop, but is up over 3% after the close.

(J&J is a Dow component.)

https://www.sec.gov/fast-answers/answerstradinghalthtm.html

A trading halt—which typically lasts less than an hour but can be longer—is called during the trading day to allow a company to announce important news or where there is a significant order imbalance between buyers and sellers in a security.

sergiomattei• 7 years ago

Was it a circuit breaker tripping? Afaik markets often implement them to halt trading if the stock dips too fast too quick.

tempsy4• 7 years ago

It was planned given the news, but clearly something leaked beforehand because it dropped significantly in the minutes prior to the halt.

BinaryIdiot• 7 years ago

I don't think a Dow component has ever been halted before, so this is highly unusual.

What do you mean? Stocks get halted all the time especially before big news.

tempsy4• 7 years ago

Dow component...

Though someone mentioned JNJ did. Otherwise it's very uncommon for a blue chip to be halted.

tempsy4• 7 years ago

Update: It's resumed trading. News was that the FAA would delay ungrounding of 737 Max until June/July at earliest, months later than Boeing originally promised.

K0SM0S2• 7 years ago

Question: how much would it cost Boeing if the 737 MAX was never allowed to fly again? Could it bring them down, on the brink of bankrupcy, or is it something they could stomach?

SteveNuts• 7 years ago

Without "doing the math" - I'd say they'd get bailed out by the US government since Boeing is a huge provider of military hardware.

lucb1e2• 7 years ago

I expect they don't need bailing, they do so much more than a single airplane model.

K0SM0S2• 7 years ago

Ha, that's the answer actually, what it'll come down to if it must. Thanks for the insight.

trhway• 7 years ago

Boeing 737-800 crash landing in 2009 already highlighted the same general issues as with 737 MAX:

https://www.dailymail.co.uk/news/article-7909915/Design-shor...

New York Times cites unpublished Dutch report on Turkish Airlines crash from 2009 in which nine people were killed near Amsterdam
Dutch investigators determined that design flaws led to the Boeing 737-800 crashing into a field
Investigators found that a sensor mistakenly triggered a command computer to idle the engine as the plane approached the runway for landing
But American investigators with the US government and Boeing pressured the Dutch investigators to emphasize pilot error while downplaying Boeing's role

And that about simulator sounds very familiar too:

Boeing has stopped production of the planes and agreed to allow pilots to undergo simulator training before the jets return to service.

panarky• 7 years ago

We should stop talking about this as an engineering defect that the FAA needs X number of months to review.

The root cause is not an engineering defect, but a set of organizational, cultural, and managerial defects. This is the root cause that leads inexorably to a variety of seemingly unrelated engineering defects.

Perhaps regulators should hold off on approving new airplanes until Boeing can demonstrate that they have fixed the organizational, cultural, and managerial defects that are the root cause of their safety problems.

kangnkodos• 7 years ago

I thought I saw a headline earlier today that said that Boeing was permanently halting production of the 737 Max. It was probably fake news. I can't find any real news on that subject.

Maybe the market today is overreacting to that fake news/rumor?

oarsinsync• 7 years ago

You may be confusing 'officially' with 'permanently'

There's a headline on the front page of HN saying that they've officially halted production.

https://news.ycombinator.com/item?id=22108220

mrr54• 7 years ago

I don't really understand halting share trading. Who is the exchange to say who may or may not trade a product you own? It just seems weird. If there's bad news, the people who pay attention most closely, and get access to that information the fastest should be allowed to use it, surely?

lucb1e2• 7 years ago

Indeed, this is the first time I heard such a thing is even possible. When buying stock I got the impression I would own that part of the company and never read that I may not be able to sell that property if the company in question so wishes. I thought it was a relatively liquid investment but apparently not necessarily so?

devmunchies3• 7 years ago

Do people even hold the physical stock titles anymore? There is nothing preventing someone from selling a physical title. Its why I'm weary of a cashless society.

djannzjkzxn• 7 years ago

Shares are often halted for major news. I think it’s meant to protect sellers from situation where many sell with a market order and the price goes near 0. This would result in a wealth transfer from more naive “Main Street” traders to “Wall Street” market makers. Although if the market makers are effective enough, you wouldn’t need the halt at all.

lrajlich• 7 years ago

It’s to prevent flash crashes. If you don’t like the rules of the exchange you can always trade your securities elsewhere (eg otc)

dmurray2• 7 years ago

To be clear, you as the shareowner can't legally do this. The company took the decision to be publicly listed in the US, and one of the consequences of that is that shareholders can only buy and sell their stock in accordance with the rules of the exchanges and the SEC. It's not normally a big downside: trading halts are rare and short.

devmunchies3• 7 years ago

I've realized that everything I own it is because I have permission to own (and someone else, permission to sell). Property rights have not been properly defended so they are fading away.

I was reading Stripe and Braintree's restricted businesses (https://stripe.com/restricted-businesses) and saw "unauthorized sale or resale of brand name or designer products or services". If I own something physical there should be nothing telling me I can't sell it.

generalpass2• 7 years ago

I was reading Stripe and Braintree's restricted businesses (https://stripe.com/restricted-businesses) and saw "unauthorized sale or resale of brand name or designer products or services". If I own something physical there should be nothing telling me I can't sell it.

Property rights also apply to Stripe, in that the company, as an asset itself, can be restricted by its owners to conduct business in some certain way.

And I wouldn't be surprised if Stripe's policies will have more to do with the credit card companies than Stripe. Then, further, the credit card companies act as a cartel by using the government to prevent anyone else from using property to create a competing service by making the ROI on creating a competing service worse than other investment opportunities, or even just blocking it outright under some nebulous "shut down for accounting irregularities" or "insufficient consumer protections" nonsense.

sarbaz• 7 years ago

Regulation of commerce is one of the powers we explicitly set out as belonging to the government. In the American system free trade is a reflection of some of our values but not some inherent unalienable right.

magduf2• 7 years ago

They should have paused all building of the 737MAX long ago, and switched to other models. The 777 in particular seems to at least have a stellar reputation still.

nwallin• 7 years ago

You can't really just up and retool a production line for a one year delay. Even switching to 737NG isn't really possible.

And the triple 7 isn't a replacement for the MAX. It has double the passenger capacity. It's like if Ford had to stop manufacturing Fiestas and manufactured F-150s in their place. These are different markets.

magduf2• 7 years ago

It should have been pretty obvious that this plane was a turkey and that building more of them was just throwing good money after bad.

Meanwhile, they could have been producing more planes that don't have problems, and actually sell, even if they are for different markets. There's a backlog for all planes, so switching to something else would have at least helped clear that backlog and net more profit, instead of just building more planes that are just going to sit in parking lots.

While doing this, they should have immediately started work on engineering for an all-new replacement for the 737.

Of course, instead of having me as their CEO, Boeing would rather have some clown like Muilenberg who makes stupid decisions that got them to where they are now, and then give him a giant golden parachute when they get rid of him for incompetence. I would have cost far less.

Boeing Shares Halted Pending News

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