Did Rep. Wicker Move the Stock Market Today?
Rep. Roger Wicker (R-Miss.) may have moved the stock market today, whether he meant to or not.
Wicker issued a news release this morning announcing that a company with connections to his district, International Truck and Engine Corporation, won a $623 million Defense Department contract to produce 1,200 Mine Resistant Ambush Protected armored vehicles for the Marine Corps.
International Truck partners with Griffin Armament, which has a plant in West Point, Miss., within Wicker’s district, according to Wicker’s release.
While the announcement is good news for Wicker’s district, which is expected to gain 350 jobs as a result, it may have been premature, according to a Pentagon spokesman.
The Pentagon reveals contract winners daily at 5 p.m. as a matter of policy, according to a DOD spokesman. The military waits until the financial markets are closed so that the news does not cause one bidder’s stock to soar and another’s to tumble.
But following Wicker’s announcement, the share price of Navistar International Corporation, International Truck’s parent company, closed up 4 percent today while Force Protection Inc., one of the losing bidders, dropped 6 percent — or about $120 million.
Force Protection had just been awarded a $490 million contract to produce 1,000 of the same vehicles, referred to as MRAPs, for the Marines in April.
Armor Holdings, which outfits military Humvees with armored plating, lost about 1 percent in Thursday’s trading.
The MRAP is expected to replace Humvees for use in Iraq.
Roy Wiley, spokesman for Navistar, confirmed that as of late Thursday afternoon, Navistar had not been told whether it won the contract or not.
Kyle Steward, Wicker’s spokesman, said he was not aware of the Pentagon’s policy.
“We got notification this morning from the Pentagon,” he said. “Based on that information we had a release ready to go. We weren’t told we had to wait.”
Steward added that the Marine Corps sent Wicker the letter shortly after 7 a.m. and confirmed the information was then public.
Chris Isleib, a Pentagon spokesman, reiterated that contract information is not intended for public dissemination until 5 p.m. because of the possible stock market ramifications.
After 98 years of trading on the New York Stock Exchange, Navistar was removed from the Standard & Poor’s 500 index and delisted by the NYSE late last year for not filing its 10-K annual report to the Securities and Exchange Commission on time.
Navistar’s Dec. 15 announcement that it was restating its earnings back to 2002 prompted its removal. The company now trades its stock on the Pink Sheets, a lesser exchange.
Wiley said International Truck is the best company for the job, even though it does not currently produce MRAPs.
“We’ll be making a brand-new vehicle,” Wiley said.
“We probably have the greatest production capacity of any of the nine companies” that bid for the contract because of its significant truck manufacturing operation, he said.
International Truck does have troop transport trucks in the field in Iraq and Afghanistan already, Wiley added.