Donald Trump’s words do not only cause a storm on social media, they also affect capital markets.
The president-elect’s latest feud is with Boeing, the major US manufacturer of airplanes. In a tweet, he said that the costs for the company’s new Air Force One government plane were “out of control” at $4 billion and the government contract should be canceled.
Before his tweet, the company was trading at $152.16 per share. After the tweet, it fell close to 1 per cent during pre-market trading on Tuesday to $149.75 per share, according to FactSet.
The bump was temporary as the share price has since recovered and are still up about 5 per cent year to date, but the dip shows the knee-jerk reaction from investors when the president-elect expresses his views on a company.
Boeing’s market capitalisation at Monday’s stock market close (5 December) was $93.91bn, according to data from Reuters.
Today’s 0.84 per cent fall in the share price of the aerospace giant in early US trading therefore represents a decline in the value of the company of almost $1bn.
Boeing won a contact in January to stat working on a new fleet of government aircraft, called Air Force One.
They won an initial contract worth almost $26 million to reduce risk and lower cost. More Here
See Tweet Here
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!
— Donald J. Trump (@realDonaldTrump) December 6, 2016