Boeing (NYSE:BA) was down 7.3% in early afternoon trading on March 11. This represents the sharpest drop the stock has absorbed since the start of the year. Still, shares have managed to rebound from a 12% drop in early morning trading.
On Sunday Ethiopia Airlines flight ET302 crashed, killing all 157 people aboard. Boeing has quickly faced questions over the safety of the 737 MAX 8 jet. On October 29, 2018 Lion Air Flight 610 crashed into the Java Sea 12 minutes after takeoff. All 189 passengers and crew were killed in the accident. Boeing would later issue a warning to all operators of the 737 MAX series to avoid causing an abrupt dive.
The Manoeuvring Characteristics Augmentation System is an anti-stall system designed for safety. There are now suspicions that this tool is malfunctioning on the MAX 8. However, safety experts are warning against speculations as the investigation has just opened.
China, Indonesia, and Ethiopia have responded by grounding all 737 MAX 8 aircraft. On Sunday Boeing said that it would postpone the ceremonial debut of its 777X widebody aircraft as it focuses on combating this crisis.
Boeing stock had been a top performer on the DOW before this incident.
In its most recent earnings report Boeing revealed that it expected to crush record jet deliveries for the year. The company beat out analyst expectations and reported earnings per share of $3.06 in Q4 2018.
Shares were already in pricey territory, but investors should most certainly stay on the sidelines now as this investigation gets underway.
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