Boeing Co. (BA) - Get Report shares extend gains Thursday, following the biggest single-day surge in nearly a month, as investors reacted to reports that suggested Dan Loeb's Third Point investment fund had taken an equity position in the world's second-largest planemaker.
The activist investor's Third Point Offshore Fund listed Boeing, as well as Walt Disney Co. (DIS) - Get Report and Burlington Stores (BURL) - Get Report, as three of its five 'winners' for the month of May, igniting a rally in Boeing shares on the suggestion that the investment was equity based. CNBC later reported, however, that Third Point purchased Boeing debt.
Boeing shares were marked 4.1% higher in early trading Thursday, against a 25 point decline forecast for the Dow Jones Industrial Average, to change hands at $180.18 each, a move that would peg the stock's four-month decline at around 45%.
Corporate bonds have lagged stocks over the past two months following the Federal Reserve's March 23 decision to purchase $75 billion in company debt as part of its coronavirus rescue program -- the iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) - Get Report , the market's largest, has risen more than 25% since that date, compared to a 39.5% gain for the S&P 500 -- but the support has allowed many companies, including Boeing, to strengthen their balance sheets with cheap financing.
Boeing sold $25 billion worth of bonds in a seven-part deal priced on April 30 that was, according to IFR data, the sixth-largest U.S. dollar offering on record.
The deal also drew an unprecedented $288 billion in investor demand - just days after analysts at S&P lowered its credit rating to BBB-, two notches above 'junk' status.
Boeing told investors prior to the offering that access to additional liquidity will be "critical" for the company, after its cash burn rate hit -$4.73 billion over the first quarter.
The planemaker's shares have also been supported by the partial re-start of its 737 MAX production program as well as statements from key European customers such as SMBC Aviation Capital, a Japanese-owned aircraft leasing company based in Dublin, and Germany's TUI Group (TUIFY) , that suggest existing orders for the grounded plane would be delayed, but not cancelled, following talks with executives in Seattle and Chicago.