Should SpaceX buy Boeing? One investor says ‘yes’ (NYSE:BA)

SpaceX Falcon-9 Rocket And Crew Dragon Capsule Launches From Cape Canaveral Sending Astronauts To The International Space Station

Saul Martinez

Boeing (NYSE:BA) is working to rebuild its business after losses piled up as the aircraft maker grappled with two fatal 737 MAX crashes and other difficulties. Its investors would be best rewarded if SpaceX, the spacecraft maker founded by Elon Musk, bought Boeing (BA) and broke it up.

That’s the claim by Duncan Davidson, partner at Bullpen Capital, speaking in an interview Thursday on business news channel CNBC.

“Elon likes to fix things. Boeing (BA) needs to be fixed,” Davidson said. “It may be the space segment of Boeing (BA), which is what Elon would want, would be relatively cheap. Because I think Boeing (BA) is selling at a huge discount to a breakup value.”

In such a scenario, SpaceX would acquire Boeing (BA) and spin off its defense and commercial jet units, while holding onto the spacecraft business. The moves would position SpaceX to win more longer-term contracts from the U.S. government, such as for rockets that ferry astronauts to and from the International Space Station.

“The reason why Elon is the right guy, by the way, is that Boeing (BA) has to get back to an engineering culture,” Davidson said, pointing to the 797 as a plane that never got off the drawing board. “The engineering culture would have launched it. The finance culture doesn’t launch anything.”

Musk, who also is CEO of electric car pioneer Tesla (TSLA), last month completed a $44 billion deal to take social-media platform Twitter (TWTR) private. He’s now implementing his plan to make Twitter less dependent on advertising revenue for growth.

Davidson also said technology giant Microsoft (MSFT) should buy streaming-device maker Roku (ROKU) to catch up with Apple (AAPL) and Amazon (AMZN) in the streaming video market. The move would position Microsoft (MSFT) to eventually acquire Netflix (NFLX), assuming antitrust authorities wouldn’t block the deal.

Online marketplace eBay (EBAY) also should buy Carvana (CVNA), the online used-car dealer whose stock is down about 95% this year, to expand its offerings, Davidson said.

Boeing’s (BA) stock this year had declined 28% through Nov. 2, compared with a 22% slide for the Standard & Poor’s 500 index (SP500). Microsoft (MSFT) was down 34% for the same period.


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