The forecast that President Donald Trump would enforce the prices of the aerospace industry prompted a publication by Andrew Left. Left, of Citron Research, is the short seller that brought down Valeant Pharmaceuticals.
On the day the President was sworn in, Left made it known to bet against TransDigm Group, an airplane parts manufacturer. After the publishing of his paper, stock for TransDigm dropped as low as 13 percent. By the time the market closed that day, the TransDigm lost $1.4 billion in market capital. This made TransDigm the worst performing stock on the S&P 500 that day.
Left wrote that, “President Trump has become to aerospace what Hillary was to pharmaceuticals. He has already made lowering prices for military aircraft a pillar of his transition into office.”
Once again Trump’s Tweets called out companies. Trump wrote about the high price of Boeing Air Force One being “out of control”. Less than a week after that Trump went after Lockheed and Martin’s F-35. It would seem since the Department of Defense gave majority of its business to TransDigm, the company would receive the brunt of Trump’s influence.
An analyst from Credit Suisse, Robert Spingarn, sided with TransDigm. Spingarn agreed that TransDigm’s product prices are high, but the company also has a larger growth rate than its competition. Spingarn also commented that “lower prices from TransDigm” would be a definite red flag to investors.
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