Porgie,

Your experiences with BA are the norm. Top management checked out long ago but the decline picked up steam once McNerney took over in 2005.

No way for BA to survive apart from selling itself off in pieces to make good on that enormous debt pile. Negative $26/share net tangible value so shareholders own nothing here. It's all owned by the bondholders and pensions. Odds are the company ends up in bankruptcy court. Sure, the company will continue on but the common shares go to the graveyard.

Before anyone chimes in that BA will get a guv bailout, that makes no difference for common shareholders. Still get screwed. Just ask the shareholders of Government Motors when Barry provided a "bailout".

No reason for any entity to buy them out when they can simply wait for the bankruptcy filing and then pick up the few valuable pieces for pennies.

DM was a scam from the outset as are nearly all entities that have come public via SPAC or direct listing. The initial SEC filings displayed all the red flags that DM was one to avoid. The filings related to the purchase of Envision Technology alone highlighted the sheer incompetency of DM management.

Expect to read a PR before long that the CEO is stepping down "to pursue other interests".

Folks, this one will not survive. Incinerating cash rapidly. Tried to raise capital and discovered that the window had all but closed on them. Had to settle for a $100 MM convert which they'll burn through in less than six months. Diluted another 60 million shares.

Based on the enormous volumes Tue and Wed, all the tutes and insiders have now likely unloaded. Confirmation filings likely show up next month.

Should have enough cash to pay the bills for another year or so but a date with the bankruptcy judge awaits thereafter.

Looks like the jig is up.

Prospectus filings today. Over 130 MM shares being offered.

Everyone bailing out including CEO Fulop. He's selling 20 MM shares, almost his entire stake.

Ford is liquidating too. All 4.3 MM shares.

So long everyone, thanks for playing.

QID weekly chart remains on a 'Buy'. Shares still comfortably above the 45-week MA.

Also had a crossover. 9-week MA above the 45-week.

Q1 results will be brutal.

AMZN booked $11.8 B gain for Q4 2021 on its Rivian stake. They'll book almost that total amount as a loss when they close the books at the end of the month. RIVN has cratered and AMZN owns more than 17% of the company. Easy come...

BA has become predictable. Look at the daily chart. Can't get past the 200-day MA and sustain it. Has served as resistance going back to August. Now shares in danger of dropping below the 400-day.

On the weekly chart, even clearer. Can't break above the downtrend line in place since early 2019.

QID registered an important breakthrough today on the weekly chart. Finally closed above the 45-week MA. Last time the shares traded above that threshold was nearly three years ago.

"The selloff ends when $AAPL hits its 200da"

May pause there for a DCB. Then visits the 400 day.

When corporate bond market gets the yips, then Bank of Apple core shows the rot. Gets taken out back...along with many others.

Aye,

340 looks like minor support. Then another minor support range at 310 to 320. Below there it's a long drop to 260.

Weekly chart remains on a 'Sell' signal since March.

Shelf registration filed Oct 21st so beware. Possible dilution if the company files for a secondary.

Wb,

Looks like the Lake Street analyst NAILED it!

DM missed bigly on bottom line today. Allegedly beat on the top line but who knows? They keep buying other firms' revenue streams since they have none of their own to speak of.

The big M&A deal in the quarter was an outfit called Envision, a company which hasn't shown any revenue growth or profits for the last three years. So naturally, DM paid 9X revenues!!!! Can you say goodwill impairment?

Headed for single digits.

Great quarterly results Monday but shares getting overwhelmed by macro issues.

Long-term, one to own. Short-term, one to trade as it's stuck in a declining trading range.

The base value of the contract is $60 million but PR doesn't specify the period of performance.

Likely not all in one year. Assume at least 18 months, potentially 2 to 3 years. Not anything close to significant.

Forget the $23 million of options on the contract. Always assume those won't get funded, especially with the new administration that already has demonstrated the defense budget will have difficulty keeping pace with inflation in the next four years.

KTOS has a very long track record of issuing press releases for contract wins that are but a fraction of the headline numbers.

Not a good Q4 report. Margins stunk it up again. 2021 forecast not looking much better.

Also not a good sign that the 10-K is delayed...again. Promising to deliver by Mar 16.

Expecting an ugly Tuesday but today's trading tipped us off. Puny volume and SSYS served up a black candle.

Kudos on the the prescient call. Only took a month for the price to break the 50 barrier.

So now that the chart has worked off the overbought condition, where to next?

55 to 60 resistance, 30 to 33 support.

"What am I missing?"

Stock hasn't done much because company management has a very long history of under-delivering on promises.

Every quarterly CC, they have some sort of excuse why the promised growth didn't come to fruition.

The growth driver is unmanned systems but the schedule continues to be pushed out to the right on every program in this division. No meaningful unmanned revenue growth will show up until 2021, at the earliest. Don't hold yer breath.

Meanwhile, the company continues to publish wildly misleading press releases regarding "contract wins". Last week was the latest example when they issued a PR claiming a $400 million, 5-year Skyborg contract win. They won nothing. One has to read the PR issued by the Air Force to get the real story. AF issued the contract to FOUR companies: Boeing, General Atomics, Kratos and Lockheed-Martin. Kratos must now compete with these three companies on every task order released against this contract.

Last week's rumor about a buyout is also par for the course. Kratos shares get goosed about once a year with these fake rumors. Lockheed-Martin was attached to the latest rumored buyer. Pure nonsense.

Fed printed $2 T and it got SPX just slightly more than a 50% retrace.

Another $310 B from Treasury won't move the needle. Especially since these funds aren't being mainlined to Wall Street trading desks but rather more mundane allocations like meeting payroll.

OK, the Fed has now shot its wad. They've already begun tapering (Treasury purchases down from $300 B per week to "only" $75 B per week).

We had our Lehman-like failure over the weekend with Singapore's Hin Leong Trading collapsing due to massive fraud. The company owns one of the largest crude oil storage facilities in the world and now the ability to store at its facility has been suspended. Just one of the reasons why crude prices crashed today.

And now come the waves upon waves of credit defaults.

Fed is powerless to do anything. This isn't a liquidity crisis, this is a solvency crisis. They cannot print cash flow. Step aside and let the bankruptcy courts sort it all out, as they should have done 11 years ago.

Short at will. The real drop is about to get underway.

And this was all pure jawboning.

The Fed is, of course, prevented by law from purchasing equities and corporate bonds directly. They get around this restriction by 'loaning' funds to Special Purpose Vehicles (cough...cough...Blackrock) who do the buying on behalf of the Fed.

To date, the Fed (through its loans to SPVs) has not purchased a single share of ANY ETF. No investment grade bond ETF's nor any junk bond ETF's.

Loans on the Fed balance sheet (for the week ending April 15) totaled $120 B which was down slightly from the prior week. The largest portion of these loans, $52 B, is for the Money Market Mutual Fund Liquidity Facility. Second largest component is Primary Credit, at $41 B. The balance for Secondary Credit (which includes corporate bonds, corporate bond ETF's and junk bond ETF's) shows a balance of zero.

Regardless of when the lock down orders are rescinded, the damage has been done.

No V-shaped recovery coming. Sure, there will be a surge. Any positive activity will seem like a boom when starting from zero. Yet, the global economy was teetering on the brink of a depression BEFORE the virus hit. All one has to do is look at the number 1 car market in the world, China, for confirmation. Trouble began back in 2017 when China's car sales were up just 1.4% for the year. Lowest increase in decades.

In 2018, China's car sales declined for the first time in history, down 4.7%. In 2019, sales declined 9.6%. Numbers which indicate that China was likely already in recession. China also set a new record in loan defaults in 2019, breaking the record set in...2018. We also saw a record number of Chinese banks go Tango Ultra in 2019.

Now the global economy has been knee-capped. Will take years to recover.

AMC is headed for bankruptcy, despite today's 9% price gain. Note that the company's bonds did not participate in today's rally. The 2027 notes closed at just 35 cents on the dollar. When bond prices decline that far, almost always results in a restructuring.

Next interest payment due on the bonds May 15th. Default likely. If so, the game is over for shareholders and bondholders.

Scruffy,

I too recently got back in. However, didn't sell outright. Instead sold April covered calls against the position.

Best of health to you and yours.

"I'm thinking this will get back to $40..."

Yes the low 40's would be in play if $SPX drops to 2000.

If $SPX retreats back to 1800, then SPXU would be nearing 50.

Will try to wake this board from slumber.

EDZ just getting started on a tremendous run here. First resistance is the March high of 77. If the shares can get through and sustain it, then lots of room to advance above there. No resistance until triple digits. Current support at 45. Happy trading.

Agreed.

AMC bond prices have been telegraphing that the situation is terminal.

'26 and '27 issues both still trading below 50. The bond market no lie.

Yep, most likely.

2600 might be a goner today.

2100 in play perhaps in a week or so?

t68,

Aye, perhaps so. SPX support at 2850 looks weak. 2600 should be a bit firmer. If that gives way, then the situation really gets interesting.

Well since your post, we've seen that KTOS management is the same as it has always been. Forever has an excuse as to why the company missed its estimates or timelines.

This time around they had multiple excuses. The earthquakes out at China Lake last summer which delayed a Gremlins test flight, the 2020 CR that dragged out into December and the anomaly investigation on the 3rd test flight for Valkyrie which dragged on for four months.

Surely next quarterly CC, they'll trot out CV-19 as an excuse. You can probably also bet they'll trot out some blame for any Gremlins delay on the buyout of Dynetics by Leidos Holdings (announced in December).

Bottom line, 2020 is a lost year. Even if the company hits the high end of its sales forecast this will be just mid single-digit growth. Worse still, management tells us that there will be no Valkyrie deliveries, Project Airwolf deliveries or Gremlins deliveries until 2021.

Stock is dead money for the rest of the year. Chart reflecting this. Support at 11, resistance at 16 and 17.

Be careful.

BA chart looks very shaky. Went up too far, too fast. Didn't spend enough time consolidating gains along the way.

Weak support at 225 and 175. Only solid support looks like 125.

As for the clown who currently occupies the CEO chair, his juvenile comments this week show Wall St that the new boss is just as unqualified as the last. This should surprise no one.

All,

Pay attention to the bonds.

Pricing has weakened noticeably since Tuesday.

Both the 2026 and 2027 notes now trading for 87 as of this writing. Lowest prices since July.

Liquidity also scarce. The 2027 notes had but a single trade on Tuesday.

New boss has been complicit in the MAX fiasco from the outset. Like McNerney, he's not an engineer apart from financial engineering.

Management has no credibility.

Without credibility, there is no trust. Will take years to regain both.

Without trust, the stock is un-investable. Fine for traders but not for those who buy and hold.

Chart is a mess and continues to deteriorate. Support levels at 320, 290 and 250.

Not sure why it popped more than 7% today but we'll take it.

Has been way too undervalued for a few months now.

Sure, they stopped offering pensions to new employees. However the company didn't cancel its legacy pensions and did not discharge its obligations in any way.

All of its pension plans remain underfunded. Mostly in the 80% range if we ignore the MAP-21 pretense.

Ignore any BA M&A rumors. Company has too many headaches already with KC-46 and 737.

BA committed some financial blunders in the past couple years as well. Issued in excess of 10 million shares a couple years back to fund the pension and yet the plan remains underfunded (about 80%). Made the move in advance of tax reform to get a bigger write-off. Problem being they sold in the $230 to $240 range (if memory serves).

For most of this expansion, the company was modestly leveraged with cash staying close to even with long-term debt. That has gone the wrong way in the last year or so. Debt now over $15 billion, cash under $8 billion. Picked the wrong time to lever up.

Watch for a dividend cut in the next couple of years.

I see that Culp hedged his bets this morning about issuing equity:

“We have no plans for an equity raise,” he said. “As conditions change in the future, we might come back and reconsider that. But we’re very keen to deleverage. We think we've got a path by way of the asset sales to do that. And that’s the plan we’re going to work.’’

Keep an eye out for shelf registration statements and then be ready for a preferred or convertible preferred issue.

Yet dilution risk is relatively minor compared with solvency risk. If we get another credit crunch, GE won't make it. Company will have to bank on Bailout 2.0 but can't see this Admin going there.

GE price target cut to $6 at J.P. Morgan; shares slide 3%
Nov. 9, 2018 7:44 AM ET|By: Carl Surran, SA News Editor

General Electric (NYSE:GE) -3.3% pre-market after J.P. Morgan's Stephen Tusa cut his stock price target to $6 from $10 and says GE's recent earnings were worse than expected on almost all fronts.

Tusa says GE's forecasts for free cash flow and EBITDA moved materially lower, while a material change in language from the 10-Q suggest a negative step down in leverage.

The longtime GE bear foresees a deterioration in run rate fundamentals to continue and predicts that by 2020, six of eight segments will be showing "zero" free cash flow.

"While the stock is down ~70% from the peak of $30, this move still does not sufficiently reflect the fundamental facts," Tusa writes.

This is now serious.


GE slides again as Moody's cuts credit rating
Oct. 31, 2018 3:11 PM ET|By: Carl Surran, SA News Editor

General Electric (GE -1.1%) shares are on track for a sixth straight loss as Moody's downgrades the company's credit rating by two notches to Baa1 from A2, three notches above "junk" territory; the rating outlook was changed to stable.

Moody's says the downgrade reflects its view that "the adverse impact on GE's cash flows from the deteriorating performance of the Power business will be considerable and could last some time. The weaker than expected performance at Power is not only attributable to a considerable drop in market demand and ensuing heightened competition, but also to GE's misjudgment of financial prospects and operational missteps."

Moody's downgrade comes about a month after S&P cut GE's credit rating to BBB+ from A, also three notches above junk.

Shares are lower even after UBS this morning upgraded its GE stock rating to Buy, expecting forward corporate event catalysts and portfolio moves to improve visibility and strengthen the balance sheet.

-----------------

Today's downgrade from Moody's locks GE out of the Commercial Paper market. They'll have to resort to using a revolving credit facility but that carries a higher interest rate.

GE's bond prices weakened today.

Company is going to have to raise capital, likely via equity. Yes, the new CEO was adamant on the CC that no equity raise is being planned. We shall see but don't be surprised if shareholders get diluted down the road.

Agreed. Typical overreaction.

At least the chart filled the August gap at 13.57.

CC sounded great to this observer.

Primary issue the company had this quarter was insufficient capacity to meet demand on metal 3D printers. That's a very nice problem to have in this economy, no? Indicated that it may take until first quarter of '19 before capacity is in place to meet demand.

Company continues to take market share from the competition.

Missed the dip into the 12's but added in the 13's.

No deals prior to the Annual Meeting Oct 30.

But afterwards? No doubt that Standley has something up his sleeve.