Why Boeing Stock Is Down but May Not Be a Bargain

This does not feel like an opportunity to buy the stock at a nice discount, but the beginning of a period in which questions arise about the company’s culpability in the Malaysian Airlines incident. The answers could turn on a report called an “airworthiness directive” regarding Boeing’s 777 planes. According to Federal Aviation Administration report:

We are adopting a new airworthiness directive (AD) for certain The Boeing Company Model 777 airplanes. This AD was prompted by a report of cracking in the fuselage skin underneath the satellite communication (SATCOM) antenna adapter. This AD requires repetitive inspections of the visible fuselage skin and doubler if installed, for cracking, corrosion, and any indication of contact of a certain fastener to a bonding jumper, and repair if necessary. We are issuing this AD to detect and correct cracking and corrosion in the fuselage skin, which could lead to rapid decompression and loss of structural integrity of the airplane.

Until the Malaysian Airlines 777 is found, the questions of Boeing’s culpability will remain an overhang for the company.