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Pro Analysis

Trump's use of Twitter as negotiating platform may hurt defense stocks, Cowen says

Donald Trump
Carlo Allegri | Reuters
Donald Trump

Cowen warned investors that Donald Trump's tweet criticizing Boeing on the Air Force One program's costs increases the risk on shares of defense companies with big-name contracts.

"Trump's tweet lambasting the Presidential Aircraft likely won't have meaningful direct impact on BA as its current contract is small," analyst Cai von Rumohr wrote in a note to clients Wednesday.

"However, his emerging habit of using Twitter as a bully pulpit could become a threat to controversial high profile programs."

The president-elect on Tuesday tweeted he would like to cancel the government's Air Force One order, saying the "costs are out of control."


Rumohr said Trump's tweet isn't a big threat to Boeing's business because the company's current Air Force One design contract is only $170 million and the project's future was already "uncertain."

"The more important issue, however, is Trump's emerging pattern of using Twitter as a bully pulpit to negotiating leverage over targeted businesses, e.g. Carrier, Boeing on issues of concern," he wrote.