Sunday 18 August 2019

Donald Trump sends one tweet about Lockheed Martin's F-35 fighter jet costs - and knocks $3.5bn off its stock value

Zlata Rodionova

President-elect Donald Trump has sent another stock reeling into the red.

Barely a week after taking shots at Boeing, Donald Trump took a swipe at Lockheed Martin's F-35 fighter jet program on Monday morning, saying the cost was “out of control".

Based on the number of shares outstanding, the tweet has shaved just over $3.5 billion from Lockheed's market value.

The tweet comes just one week after Mr Trump took aim at Boeing over costs for the replacement Air Force One. Boeing fell by 1.5 per cent after the tweet but ended the trading day positive.

Altough Lockheed's dip is temporary it is a reminder of the knee-jerk reaction from investors when the Presiden-elect expresses his views on a company, and a cause for concern that a much-anticipated uptick in defense spending in 2017 may not be as lucrative to contractors as once hoped.

"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," Trump said.

A week before Mr Trump won the presidential election, the US Defense Department and Lockheed Martin concluded negotiations on their ninth contract for F-35 fighter jets after 14 months of negotiations on the deal of more than $6.1bn, the Pentagon said.

The F-35 Lightining II is meant to become the next leading-edge platform for the US Air Force, Navy and Marines, as well for the armed forces of nearly 10 US allies, including the UK, Netherlands and Australia.

Last week, the President-elect took a shot at Boeing by threateaning 747 Air Force One program. He claimed the total cost of a new 747 would be more than $4bn.

The aircraft manufacturer took a $1.4bn hit to its market value.

In response to Mr Trump's tweet, Boeing said that its current contract with the Air Force is actually for $170m.

The cover of 'Time' magazine. Photo: Reuters
The cover of 'Time' magazine. Photo: Reuters

Independent News Service

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