When the last U.S. draft card was mailed, and the last lottery held, I was but a babe. But I've heard the stories, and I've seen the documentaries, and from what I can tell, few people were pleased to learn they might be drafted and sent to war in Vietnam.
In fact, I hear some were incensed enough to find out whether the draft cards were incendiary. (Turns out, they were.) But that's not the reaction at iRobot
The Associated Press broke the story Monday evening. "The Pentagon plans to purchase up to 3,000 additional robots to be used by U.S. soldiers in Iraq and Afghanistan to detect explosive devices and roadside bombs," the story read. And it wasn't long before investors began popping the champagne. On Tuesday, the stock leapt 12% in response to the news, even though (1) the company issued no press release of its own on the subject, and (2) the AP story made it clear that iRobot can expect both Exponent
Yet even if iRobot wins only its fair share of the contracts, the implications look pretty good for the company, and for its investors. Consider: Both Foster Miller's and iRobot's bomb-disposal robots -- termed the Talon and the PackBot, respectively -- are reportedly fetching in the neighborhood of $60,000 per unit. Exponent's less advanced MARCbot reportedly sells for much less. Assuming the Pentagon goes after the pricier, higher-tech option, that's perhaps $180 million in contracts up for grabs, folks -- nearly a full year's revenue at iRobot.
Of course, even the most optimistic shareholder can't expect to cram all of this lucre into a single year. According to AP, "only" an initial tranche of 1,000 robots will be ordered this year. The balance of the 3,000 may be ordered by 2012. Which leaves me with just one question:
Um, did the AP just suggest that we're still going to be in Iraq in 2012?
Well, if we must be there another five years, savvy investors will want to own a piece of the companies that support our efforts there -- and General Dynamics