Boeing stock price down after Ethiopian Airlines 737 MAX 8 crash
Boeing's stock fell 11 percent in early trading Monday after its top-selling 737 MAX 8 plane was involved in a second deadly crash. Ethiopia, China and Indonesia grounded all Boeing 737 Max 8 planes after the Ethiopian Airlines crash on Sunday that killed all 157 people on board.
Through Friday, the stock had surged almost one-third since the start of the year.
The 737 MAX -- which includes three other models other than the MAX 8 -- is Boeing's fastest-selling airplane, the company said last month. The line has exceeded 5,000 orders as airlines get drawn to the new planes because of their fuel efficiency.
While there was no immediate indication why the Ethiopian Airlines plane went down in clear weather while on a flight to Nairobi, the crash was strikingly similar to last year's Lion Air jet crash, which killed 189 people when it went down in the sea off Indonesia. Both accidents involved Max 8s, raising questions about the aircraft's safety and heightening investor concerns about the future of the top-selling plane.
"The early reaction of Boeing's stock will be negative... on the back of the potential for a link between the crashes and financial implications to Boeing from any grounding (350 deliveries to date) or delivery delays (50+/mo being added to the fleet)," said UBS analyst Myles Walton in a research note, alluding to the Lion Air crash.
The 737 MAX represent about two-thirds of Boeing's future deliveries and deliver 40 percent of profit, The Wall Street Journal reported, citing analysts.
In a statement, Boeing said the company is sending a technical team to the crash site "to provide technical assistance under the direction of the Ethiopia Accident Investigation Bureau and U.S. National Transportation Safety Board."
