The Dow Jones Industrial Average (DJINDICES:^DJI) was down about 0.37% at 2:20 p.m. Monday as political turmoil and a worsening pandemic collided with all-time highs. The House of Representatives introduced articles of impeachment on Monday charging President Trump with incitement of insurrection related to his actions leading up to the deadly riots at the U.S. Capitol last week.
Turning to individual stocks, shares of Boeing (NYSE:BA) were down following a fatal crash involving one of the company’s older planes over the weekend. Meanwhile, Cisco Systems (NASDAQ:CSCO) stock rose after a court temporarily stopped Acacia Communications (NASDAQ:ACIA) from terminating its merger agreement.
Boeing stock declines after fatal crash
A Boeing 737-500 crashed soon after takeoff from Jakarta, Indonesia, over the weekend with 62 people on board. The 26-year-old plane was flown by the budget airline Sriwijaya Air.
This crash is unrelated to the two fatal crashes that grounded the 737 MAX, a newer model in Boeing’s 737 line. The older-model 737 planes lack the flight control system that was blamed for the 737 MAX crashes, including one near Jakarta in October of 2018.
The design of the 737-500 itself is unlikely to be the cause of the crash, given that the plane has been widely used for decades. But Boeing only recently managed to get the 737 MAX approved again for commercial flights. Any fatal crash involving one of its planes is not going to help the company’s efforts to rehabilitate its image following the 737 MAX debacle.
This crash comes soon after Boeing entered into a deferred prosecution agreement with the U.S. Department of Justice over the company’s actions related to the 737 MAX. It will pay a $243.6 million criminal penalty, set aside $1.77 billion for customer compensation, and spend $500 million on compensation for the families of 737 MAX crash victims.
Shares of Boeing were down about 2% by early Monday afternoon. It’s too early to know what caused the crash, but it’s unlikely to lead to groundings since the plane involved has been flying for so long. Boeing stock is now down about 38% over the past year.
Cisco aims to block Acacia from terminating merger
It looks like Cisco and Acacia aren’t seeing eye to eye. Cisco agreed to acquire Acacia in 2019 for $2.6 billion, with plans to use it to bolster its position in the optical networking market. The deal came with the standard conditions related to regulatory approval from various agencies around the world.
Acacia announced on Jan. 8 that it was terminating the merger agreement because approval from China’s State Administration for Market Regulation wasn’t received by the deadline. Acacia noted in that press release that Cisco had told the company that it may dispute the termination.
Cisco disputes Acacia’s claim that regulatory approval was not received. The company said on Friday that it was seeking confirmation from the Delaware Court of Chancery that it had met all conditions for closing the deal. Cisco also said that it was seeking a court mandate to halt the termination until disagreements were resolved in court, as well as a court order forcing Acacia to close the deal.
Cisco was granted a temporary court order blocking the termination on Friday. Bloomberg reported that a Cisco lawyer said during the hearing that Acacia believed its valuation had increased since the deal was signed and was thus trying to negotiate a better offer.
Shares of Cisco were up about 1.1% by early Monday afternoon. While it’s unclear exactly how this drama will play out, Acacia’s case doesn’t seem particularly strong. Shares of Acacia were up 3.4%.