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Boeing (BA) shares surged more than 11% at the market close and reached at $105.62 on March 23. The company announced that it would shut down production at its Seattle area factories for at least two weeks.
After a drastic free fall from $344.47 to trade below $100, Boeing Co (NYSE: BA) shares have suddenly jumped over 11% to trade at $105.62. The American multinational corporation which designs, manufactures and sells airplanes has experienced a difficult time to stay afloat for the past few years. The fall is greatly attributed to the ongoing coronavirus scare to travel, which has resulted in people on total lock-down.
Today, in the pre-market, Boeing (BA) shares are moving higher. The price is $115 (+8.88%).
In a bid to rescue the falling shares, the company announced that it plans to shut down its Puget Sound-area factories for a period of two weeks. However, the company has assured the employees that during that period, they will still get compensated as the company eyes on government funding to offset the coronavirus constraint. This is according to Barron’s which confirmed that the company’s employees who cannot work remotely will receive paid leave for 10 working days, which is double the company’s policy.
In a statement to the press, the company’s CEO Dave Calhoun said:
“These actions are being taken to ensure the well-being of employees, their families and the local community. It will include an orderly shutdown consistent with the requirement of customers.’ He added, ‘we will keep our employees, customers and supply chain top of mind as we continue to assess the evolving situation.”
The halt is expected to begin as from March 25 and match on for the next two weeks. The halt might be good news for the Boeing employees, however, it will be a piece of bad news for the companies behind the supply chain. This was a move that was definite for the company if it wanted to take control of the falling shares and demand of its services, and in turn, save the much-needed capital.
Boeing (BA) Shares and Coronavirus
Since the outbreak of novel coronavirus, a lot of restrictions have been issued regarding air travel, mostly the international ones. As a result, the aerospace industry has received the shock with a huge free fall of its shares worldwide. With the virus evolving and maybe not showing signs of stopping at the time of writing, more lockdown and restrictions are just looming ahead.
Putting that into perspective, the call by Boeing to close its operations in Seattle for the next two weeks is a move that will save the falling shares. This, however, will give the company time to work on the grounded 737 Max, which was involved in two fatal accidents last year. As the U.S. federal government plans on buying all the shares of companies to avoid a market recession, it will be an added advantage to the Boeing shares that have lost over 70% this year.