Bombardier stock is in a free-fall today, currently -10% intraday at 0.89 cents after breaching the $1.00 barrier yesterday for the first time in 25 years. The stock is down 68% since this time last year.
Bombardier's entire market cap is now valued at just USD $1.2 billion ($1.7B CAD).
This gives perspective into Quebec's USD $1 billion investment for 49.5% of the CSeries program, which now looks significantly overvalued even before the first payment has taken place.
For outside investors, any additional "investment" or "loans" from the Ottawa will put even further pressure on the stock price. The Liberals need to come to an agreement soon with Bombardier to give clarity not only to investors but to Bombardier's potential customers.
There is now the risk that Bombardier stock may be removed from the Toronto Stock Exchange composite index if it remains below the $1.00 through the end of February. Removal would trigger automatic selloff of BBD stock.
Is Bombardier now a more attractive takeover target? Bombardier execs have indicated that they are looking at "all options". Yet with negative income, $9 billion in debt and $3 billion+ in future interest payments, it's still hard to see a white knight stepping in. The best option for a potential suitor or partner is simply to wait.
Bombardier still has significant assets (including cash) and can still make a turnaround. But the remaining runway is getting shorter and shorter.