Boeing (NYSE:BA) Stock Price Jumps as CEO Suddenly Resigns

Boeing Co. (NYSE:BA) share price soared early Monday after a sudden leadership change that caps a turbulent year for the aviator.

| More on:
Aircraft wing plane

Image source: Getty Images

What a turbulent year it’s been for Boeing (NYSE:BA). The news that the aerospace giant has lost its CEO initially boosted its share price and comes after a drawn-out scandal over its 737 Max jets plus a botched space mission that played out over the weekend.

CEO Dennis Muilenburg resigned Monday, effective immediately.  The firm swapped out its chairman, David Calhoun, as CEO and president, with Lawrence Kellner taking over board leadership. The market welcomed the potential for the troubled aviator to turn its fortunes around, with its share price immediately jumping almost 4%.

Boeing’s annus horribilis comes to an end

Monday’s press release was brief, with Kellner announcing: “On behalf of the entire board of directors, I am pleased that Dave has agreed to lead Boeing at this critical juncture. Dave has deep industry experience and a proven track record of strong leadership, and he recognizes the challenges we must confront.”

Highlighting the company’s awareness that a complete about-turn was required, Kellner added, “The board and I look forward to working with him and the rest of the Boeing team to ensure that today marks a new way forward for our company.”

Investors tend to dislike management changes, especially sudden ones, meaning that Boeing stock has the potential to decline over the holiday period, opening a possible value opportunity. Current investors with a long-range vision may want to tough it out, as Boeing claws back its reputation, however, while newcomers with little aviation or transportation exposure may want to buy a ticket.

As the company limps out of the year with a sudden leadership change, bargain investors could soon have an opportunity to add one of the world’s most recognized aerospace names to a value-focused portfolio light on transport stocks.

A strong play for space industry exposure

Though the Starliner capsule returned safely, its launch did not go as planned. An anomaly meant that the uncrewed spacecraft failed to dock with the International Space Station. The spacecraft was designed in partnership with NASA’s Commercial Crew Program in a string of industry partnerships that has helped buoy the partially event-driven trajectory of the company’s share price.

As a NASA partner, Boeing presents entry into a growth sector that has few big players at present. Rio Tinto and Virgin Galactic also offer investors a route to space industry exposure, with the world-class miner having floated plans for extraterrestrial mineral extraction, and the Richard Branson spinoff company offering a space tourism pure play.

Investors seeking another NASA connection should consider Maxar Technologies for its involvement in the rebooted crewed Moon program as well as upside potential from the new satellite maintenance industry.

The bottom line

As the 737 Max controversy played out, investors had patiently waited for improvement, with developments in the space segment of the aviator’s business offering some hope. If Boeing stock declines, newcomers to aviation and space industry stocks could have a value opportunity to buy into a company with ample room to improve under new leadership in the new year.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Victoria Hetherington has no position in any of the stocks mentioned. The Motley Fool owns shares of Virgin Galactic Holdings Inc. The Motley Fool recommends MAXAR TECHNOLOGIES LTD.

More on Tech Stocks

Woman has an idea
Tech Stocks

2 No-Brainer Stocks to Buy With $500 Right Now

Given their solid financials, healthy growth prospects, and attractive valuation, I am bullish on these two TSX stocks.

Read more »

Business success with growing, rising charts and businessman in background
Tech Stocks

A Bull Market Is Coming: 1 Growth Stock Down 33% to Buy and Hold Forever

Here's why quality growth stocks such as Aritzia are compelling long-term bets for TSX investors.

Read more »

Shopping and e-commerce
Tech Stocks

1 Tech Stock You’ll Be Glad You Bought When the Bull Market Starts

Historically, tech stocks have done well during bull markets. Here’s one you’ll be happy you bought before the next bull…

Read more »

A person builds a rock tower on a beach.
Dividend Stocks

3 Stocks to Anchor Your Portfolio in a Rocky Market

Three stocks are solid anchors in any portfolio today for their outperformance in a weak market and defiance of the…

Read more »

edit Sale sign, value, discount
Tech Stocks

2 Cheap Tech Stocks to Buy Right Now

Many tech stocks offer exceptional returns compared to other stock sectors when the market is bullish. You can add to…

Read more »

Hands shaking over a business deal
Tech Stocks

Got $5,000? These 2 Growth Stocks Are Smart Buys

Are you looking to invest $5,000 in the stock market? Here are two of the best growth stocks you can…

Read more »

man sitting in front of 3 screens programming
Tech Stocks

2 Best Software Stocks to Buy in 2023 and Beyond

Salesforce (NYSE:CRM) and Constellation Software (TSX:CSU) are the two best software stocks to buy this year and beyond.

Read more »

consider the options
Tech Stocks

Is it Too Late to Buy Shopify Stock?

Shopify is one of the most popular stocks on the market. Is it too late to buy shares?

Read more »