Trump's 140 characters on F-35 wipes $2bn off Lockheed Martin
And seemingly some very odd stock movement before tweet sent
The power of the president elect to shake things up was amply demonstrated on Monday morning – when a single tweet knocked more than $2bn off the valuation of Lockheed Martin, the maker of the F‑35 fighter jet.
"The F‑35 program and cost is out of control. Billions of dollars can and will be saved on military (and other) purchases after January 20th," tweeted The Donald at 0826 PT (1626 UTC, 1126 EST). Within moments, Lockheed's share price was tumbling. By midday in New York, it was down $7.50, or 2.9 per cent, to $252.03. It closed today at $253.11, down 2.47 per cent.
The F‑35 is the most expensive weapons program in US history, with some $400bn committed. The results of all that money have been mixed – the F‑35 has been grounded by software and hardware issues, is massively delayed, has helmets so bulky they can break a pilot's neck, and may be worse in a dogfight than an aircraft that's 20 years older than it.
The immense cost has been a talking point of the program for years, however politicians have generally steered clear of serious criticism in public. But Trump went in with both feet and in four hours the stock price of Lockheed Martin was down 3 per cent.
The F‑35 is responsible for about 20 per cent of Lockheed's annual revenues and, while the project can't be legally cancelled, orders for the aircraft can be scaled back. Lockheed's stock price has now recovered somewhat, but the company's valuation is still down over $2bn from the start of the day.
By coincidence, Israel took delivery of its first two F‑35 fighters on Monday, just after Trump made his comments. The fighters were delayed by six hours after being grounded by bad weather, and the company took the opportunity to address the forthcoming commander in chief's concerns.
"We welcome the opportunity to address any questions the president-elect has about the program," it said. "It's a great program. Lockheed Martin and its industry partners understand the importance of affordability for the F‑35 program.
"For the air forces that get this airplane, it's not an evolution in technology, it's a step function in capability. Whoever has it will have the most advanced air force in the world, and that's why we're building the F‑35."
One interesting facet to the whole sorry saga is in the timing of the tweet and subsequent share price drop. Trump tweeted at 0826, but Lockheed's share price started today's dramatic fall at 0820 and had already dropped $5 per share when The Orange One made his pronouncement.
It's possible that Twitter's timestamps or the stock reporting times are off by a few minutes, or that someone had coincidentally decided to sell 900 Lockheed Martin stock for some unknown reasons. But we live in an age when tinfoil hatters abound and you can bet there'll be conspiracy theories galore on this one. ®
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