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BOMB Blowing Up

22 July 2015 by lberuti

BOMB ( Bombardier, Inc. ) grabbed a fair share of attention today. It was not due to any results reported by the company, as they are yet to announce their earnings at the end of the month. There was no profit warning either, but one of their suppliers, B/E Aerospace Inc, told analysts on a conference call today that demand for large cabin jets “has come under pressure” in markets such as China, Russia and Latin America as governments and energy companies cut spendings. That was enough to send BOMB’s stock plummeting (it fell 18% at some stage before recovering somewhat to -8%) and to send its 5 year risk premium surging 120bps to 800bps.