Shares of Lockheed Martin (NYSE:LMT) dropped 4.5% in Tuesday trading. While it's possible (even likely) that part of the drop was tied to general malaise in the markets, it's also possible there's something a bit more specific going on here.
For the better part of a decade, Canada has been negotiating with a number of defense companies -- Lockheed, Boeing (NYSE:BA), and Airbus (OTC:EADSY) among them -- to buy a new kind of plane to replace its obsolete fleet of Boeing CF-18 fighter jets.
Depending on when you checked in on the story, either Boeing was winning the competition, or Lockheed and its F-35 stealth fighter were. Today, though, it appears that both companies are in something of a losing position, as Reuters reports that Canada may delay its already long-delayed decision by another three months.
Supposedly, Canada finally was going to accept preliminary proposals from the bidders (which by now have grown to include Saab, but shrunk to exclude Airbus) by the end of March. But according to Reuters, Prime Minister Justin Trudeau has now postponed the bidding by a further three months "to give bidders more time to address security questions."
Supposedly, this delay was made at the request of industry, and some seem to think the move was calculated to actually help Lockheed's bid in some way. You'd think that would make Lockheed investors happy if it were true. But Reuters quoted Canadian House of Commons member James Bezan as placing the blame squarely on "Liberal dithering and delaying because of Trudeau's weak leadership."
Which sounds like this is something Lockheed would not be happy with.
In any case, Lockheed shareholders didn't seem to like the news, and the stock is down today -- partly because of the coronavirus, but also partly not.