Boeing Stock Hits 2-Year Low As Supplier Spirit AeroSystems Warns Of Cash Flow Crisis: Retail Faith Stays Afloat

Boeing Co. ($BA) shares slipped to a two-year low after falling over 3% to $144.13 on Wednesday morning after Spirit AeroSystems ($SPR), the builder of Boeing's 737 Max fuselages, raised serious concerns about its financial stability.

According to Spirit’s filing with the Securities and Exchange Commission (SEC), the merger with Boeing is expected to be completed mid-2025 however the company isn’t sure that it can make it till then. Spirit’s shares were down nearly 6% on Wednesday morning.

The company stated it has "substantial doubts" about continuing operations without additional liquidity for the next 12 months. 

Spirit noted it has a plan to address these challenges, though it cautioned there is no guarantee that these strategies will sufficiently stabilize its cash flow.

“The company will require additional liquidity to continue its operations over the next 12 months,” it said in the filing. 

Spirit also attributed some of its financial struggles to Boeing, citing that production constraints and revised delivery standards at Boeing have impacted its performance.

Despite the dent to its share price, retail sentiment around Boeing on Stocktwits improved into the ‘extremely bullish’ (75/100) territory with users speculating that the worst is behind the aerospace giant.

Spirit AeroSystems was originally a Boeing subsidiary before it was spun off in 2005 but continued as a key supplier of fuselages for Boeing’s 737 Max planes. 

Due to Spirit’s production delays, Boeing implemented "traveled work" which is when unfinished or incomplete planes are moved along the production line before all the necessary tasks are completed.

Regulators believe this same practice led to a fuselage panel detaching mid-flight on a 737 Max 9 in January. 

Following this incident, Boeing reacquired Spirit for $8.3 billion to address these and other operational issues.

Retail sentiment around Spirit plummeted into ‘extremely bearish’ (15/100) territory over concerns that the company is running out of money.

Spirit’s gains for the year have been flat with Boeing’s stock down 41% so far in 2024.

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