Boeing Shares See Worst Single-Day Drop Since 1974 As Company Empties $13.8B Credit Line, Seeks To Preserve Cash

The Boeing Company's BA shares tanked in Wednesday's trade as the company called for preserving cash in the wake of the financial crisis facing the aircraft maker.

Boeing To ‘Preserve Cash'

In an internal memo on Wednesday, Boeing said it was halting new hirings, and restricting overtime and work-related travel, the Wall Street Journal reported.

The move comes as Boeing seeks to preserve cash due to the increased financial burden from the extended grounding of the troubled 737 MAX aircraft and the impact on the airline business from the novel coronavirus (COVID-19) outbreak.

"It's critical for any company to preserve cash in challenging periods," recently appointed chief executive officer David Calhoun said in the memo, according to the Journal.

Cashing Out The $13.8B Loan

Boeing shares dropped earlier in the day, too, as Bloomberg reported that the company would withdraw its entire credit line in March from a loan granted last month.

A group of banks, including Citigroup Inc. C and JPMorgan & Chase Co. JPM, granted $13.8 billion in loans to the troubled company.

Boeing had withdrawn about $7.5 billion of the credit in February, and would now withdraw the rest, as per Bloomberg.

Meanwhile, the 737 MAX's ungrounding is expected to see another delay as the Federal Aviation Administration asks it to fix certain wiring issues with the aircraft before granting it the approval.

Price Action

Boeing's shares closed 18.15% lower at $189.08 on Wednesday and traded mostly unchanged in the after-hours session. This is the worst single-day posted by Boeing since December 1974.

Boeing's stock is down 41.92% year-till-date and 48.43% down compared to a year ago, about the time when the Ethiopian Airlines Crash involving the 737 MAX aircraft killed all 157 people aboard.