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Why Boeing Stock Lost 7% Today

What happened

One day after Boeing (BA -5.07%) stock bounced higher on news of a big 737 plane sale to the parent company of British Airways and Iberia (the International Consolidated Airlines Group), shares of the airplane-building juggernaut are falling 7.2% as of 1:10 p.m. ET.  

The reason: Boeing may be encountering turbulence at higher altitudes.

Boeing Starliner crew capsule after landing in 2019.

Boeing’s Starliner crew capsule after its first, unsuccessful test flight in 2019. Image source: Boeing.

So what

Earlier on Thursday, the big news around Boeing was the company’s announcement that International Airlines Group has agreed to buy 25 Boeing 737-8-200 aircraft and 25 737 MAX 10 jetliners — and taken out an option to buy as many as 100 more planes besides.

Later in the day, though, came the other big news: After a two-year delay, Boeing’s CST-100 Starliner finally launched on its second uncrewed flight test attempting to reach the International Space Station (ISS) — and prove itself spaceworthy and able to begin carrying astronauts to the ISS.

Now the good news is that, unlike Boeing’s first attempt to reach ISS back in December 2019, this second launch appears to have a better chance of success. Launching from Cape Canaveral, Florida, just before 7 p.m. ET on Thursday, the United Launch Alliance Atlas V-Centaur rocket sent Starliner into orbit without a hitch. If all goes well, Starliner should therefore rendezvous with ISS this evening, then later return to Earth for a round-trip landing.  

Now what

The bad news is that after detaching from Centaur (the rocket’s second stage), Starliner did apparently suffer a couple glitches when two of its 12 steering valves malfunctioned. And the fact that, after two years of trying to work all the bugs out of the system, mishaps are still happening may be shaking investor confidence in Boeing just a little today.

That being said, as of this writing, Boeing believes it can still compensate for this and deliver Starliner safely to ISS. Chances look good that all’s well, and will end well, making Boeing a rival to SpaceX in crewed spaceflight — and setting the stage for Boeing to launch Starliner again later this year, this time with astronauts on board.

While the glitchy valves are a disappointment, I don’t believe they’re a big enough problem to justify subtracting 7% from Boeing’s market capitalization today. Then again, with the whole dang market in the red right now, investors may just decide that any excuse to sell is a good excuse to sell.

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