Is Bombardier (TSX: BBD.B) stock a buy as it seeks share consolidation?

Be the First to Comment Read

Is Bombardier (TSX: BBD.B) stock a buy as it seeks share consolidation?

Follow us on Google News:
 Is Bombardier (TSX: BBD.B) stock a buy as it seeks share consolidation?
Image source: © 2022 Kalkine Media Inc

Highlights

  • Bombardier (TSX: BBD.B) stocks attracted some attention after it issued a notice of a special meeting on Friday, March 25, for its shareholders to seek authorization for its Class A and Class B shares to consolidate.
  • Bombardier said it aims to adjust the number of its outstanding shares to level with the Toronto Stock Exchange (TSX)-listed corporations having similar market capitalization.
  • Bombardier stock has spiked by over 85 per cent year-over-year (YoY).

Bombardier (TSX: BBD.B) stocks attracted some attention after it issued a notice of a special meeting on Friday, March 25, for its shareholders to seek authorization for its Class A and Class B shares to consolidate.

The business aircraft maker said the annual meeting, to be held at 10:30 AM EDT on May 5, will include a special resolution which will authorize the company to modify its restated articles of incorporation at the discretion of its Board of Directors to implement this share consolidation.

What is the purpose behind share consolidation?

 Bombardier said that it aims to adjust the number of its outstanding shares to level with the Toronto Stock Exchange (TSX)-listed corporations having similar market capitalization.

President and CEO of the company, Éric Martel, stated that share consolidation is a “logical and beneficial” step to transform into a “streamlined and stronger” business jet company and could potentially offer additional trading liquidity to investors.

Also read: RCI.B and NA: 2 TSX blue-chip stocks that can help amid stagflation

As of record on business close on March 7, Bombardier shareholders would be entitled to vote on the matters in the meeting.

Its Board will have the choice to decide the exact consolidation ratio and timings of share consolidation for one year after this Annual Meeting.

Bombardier (TSX: BBD.B) latest financial results

Its Q4 total revenue slipped from US$ 2.33 billion in 2020 to US$ 1.77 billion in 2021. However, its net profit notably swelled to US$ 238 million in the latest quarter, up a loss of US$ 337 million a year ago.

Bombardier (TSX: BBD.B)’s financial results in Q4 FY2021

Also read: Why is BRP (TSX: DOO) stock surging?

Bombardier’s stock performance

Class B Shares of Bombardier spiked by over 85 per cent year-over-year (YoY) and closed at C$ 1.50 apiece on Friday, with 2 million shares exchanging hands. Its Class A shares expanded by over 55 per cent in the past 12 months and closed at C$ 1.57 apiece on March 25.

Bottomline

Bombardier said that its Board will continue to observe market conditions if the special resolution is approved and decide on whether to execute this consolidation or not as it deems to be in the best interests of the company and its stakeholders.

Also read: Sigma (SGML) & Standard (SLI): Are these 2 TSXV lithium stocks a buy?

Please note, the above content constitutes a very preliminary observation based on the industry, and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.

Disclaimer

Featured Articles

We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK