Bombardier, Inc. (TSX: BBD.B): Is Its Stock Price Doomed?

Bombardier, Inc. (TSE:BBD.B) was the most shorted stock on the TSX over a six- week period to April 30, doubling from 37.7 million to 74.1 million shares

Motley Fool Canada | May 17, 2017: Bombardier, Inc. (TSX: BBD.B) has been in the news quite a bit of late, and not necessarily in a good way.

The Company’s largest institutional investors recently launched a very noisy campaign against a compensation plan for the Company’s senior management team, pressuring the board chair Pierre Beaudoin to cede his executive chairman title in the Company’s most recent annual general meeting on Thursday, though he will still maintain a leadership position on the board.

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While the executive compensation plan was approved on Thursday, the Company’s management team was also pressured to restructure its compensation plan to make the majority of the bonuses proposed come into effect in 2020 and beyond only if the Company’s financial performance improves.

Arguments can be made that Canada’s largest transportation manufacturer has done a good job of placating concerns among some of the Company’s largest investors; however, it appears that others in the industry have begun to lose faith in the ability of Bombardier to effectively deliver results.

[Editor’s Note: According to TSX, the number of Bombardier Inc. shares sold short over the six weeks to April 30 doubled from 37.7 million to 74.1 million, making it the most shorted stock on the exchange over that period. Today, Bombardier announced that it is extending its long-term partnership with IBM through a new six-year deal valued at approximately $700 million, which includes IBM Services and IBM Cloud management of Bombardier’s worldwide IT infrastructure and operations.]


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