Tremendous FALL and RECOVERY of LMT on News & Sentiments1st News
- Donald Trump said that he would not permit dividends or stock buybacks for U.S. defense companies until they fix military equipment production and delivery issues.
- Now it is required to understand that dividends are payouts to shareholders out of profits
- Generally, when dividends are not paid, the company uses the retained fund in its development, research, investing, etc.
But what's the matter? Why is he not allowing defense companies to pay dividends to their shareholders??
- Basically, he is criticizing the defense industry for prioritizing shareholder payouts over investing in factories, R&D, and faster production of military equipment.
- He also suggested capping executive pay until those issues are resolved.
Impact: The stock prices of LMT fell 7% during the regular trading hours upon the ban on shareholders' payout
--------------------------------------------------------------------------------------------------------------
2nd News
President Trump announced that he is determined to increase the US Military budget to $1.5 trillion in 2027 due to “tremendous” tariff revenue.
This would be a near 70% increase from 2025 levels.
Impact: Later, in the extended trading hours, prices recovered substantially, rising ~8.30% on the announcement of a hike in the defense budget
Education
