US President-elect Donald Trump has sent another stock reeling into the red.
Donald Trump wipes $3.5bn off Lockheed Martin market value with single tweet
Last week, Trump took a shot at Boeing via Twitter threatening to cancel its 747 Air Force One program, with the company taking a $1.4bn hit to its market value
By Zlata Rodionova
3 hours ago
Barely a week after taking shots at Boeing, Donald Trump took aim at Lockheed Martin's F-35 fighter jet program on Monday morning, saying the cost was “out of control".
Following the tweet, shares of the aerospace company plunged by more than 4 per cent in early trade.
Based on the number of shares outstanding, the tweet has shaved just over $3.5bn from Lockheed's market value.
The President-elect's comment has also had a knock-on for other companies involved in the project worth up to $400bn over the lifetime of of the project.
Shares in Northrop Gumman were down 4per cent, while Britain's BAE Systems saw its stock slip 1.3 per cent after Mr Trump's tweet.
Mr Trump's latest comment comes just one week after he used Twitter to take 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 the anticipated increase 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.— Donald J. Trump (@realDonaldTrump) December 12, 2016
"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 Lockheed Martin executive has responded to Mr Trump’s attack, insisting that the company has taken steps to cut the costs of the program.
"Since the beginning, we have invested hundreds of millions of dollars to reduce the price of the airplane by about 70 per cent since its original costing, and we project it to be about 85m dollars in the 2019 or 2020 time frame”, said Jeff Babione, Lockheed Martin’s F-35 programme leader.
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.
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 critcised Boeing by claiming the total cost of Boeing's 747 Air Force One programme would be more than $4bn.
On Twitter, he said: "Boeing is building a brand new 747 Air Force One for future presidents, but costs are out of control, more than $4 billion. Cancel order!"
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.
Additional reporting by Reuters