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  • mroleandn2000 mroleandn2000 Mar 6, 2013 8:30 AM Flag

    Inaugural Flight is Key.....

    If C-Series doesn't fly when it's scheduled to fly......well, the share price is going to tank, and it's going to tank hard (mid to low $2 range). Hence the large short position. With virtually no mutual fund holders, this sub-$5 stock, which is prohibited by most mutual funds and isn't eligible for listing on the NYSE, can be manipulated fairly easily on a daily basis. It's a very liquid stock with a large ADV. Any mention of a delay beyond the June scheduled flight, and the share price does a Led Zeppelin. There's no wiggle room for Bombardier tomorrow, it's make or break as far as their credibility goes. If all goes well, I'd expect the share price to inch up to near the $4.50 mark, but not much more than that.

    This hyped media event, if we're lucky, will reassure investors that they're on time, on schedule, and that the test flight will take place in June. Share price weakness stems directly from these issues. All eyes are on C-Series, everything else in the Bombardier pantry is ignored in the meantime. Beaudoin is going to try to make all the investors fell warm and fuzzy, with visions of dollar signs dancing in their heads. Let's see it, Dad.

    The C-Series order book is admittedly thin. 180 firms and 200 intents. It's not just the investors taking a "wait and see" stance over the C-Series. As I've said before, let's hope that the fly-by-wire system is running smoothly with no software issues. P&W geared turbofans have been certified. So, next large steps are initial flight followed by airworthiness certificate. Once these milestones have been achieved, the order book should firm up significantly. JMHO, of course.

    There's a lot riding on this new product, and it has the capacity to make or break this company now that they're $3.5B into it. It's going to take a while, but the margins on this product are extremely important to the financial well-being of Bombardier. C-Series can't become a loss leader, that'll kill this company.

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