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Drone stocks soared Thursday after reports that the Trump administration is in talks to provide funding to several companies, including one in which Donald Trump Jr. is a shareholder.
The Pentagon has been in discussions for months with a group of drone companies about possible funding, people familiar with the matter told The Wall Street Journal. The deal could include an equity interest that would give the federal government some ownership, the newspaper reported.
shares of unusual machine The company soared more than 65% after the Journal reported that it was one of the companies in talks with the Department of Defense. Given the company’s ties to Donald Trump Jr., the deal is likely to draw scrutiny from Congress and raise concerns about conflicts of interest. President Donald Trump’s eldest son is a shareholder and advisory board member.
Drone maker stock prices Kratos Defense & Security and aviation environment They rose by 15% and 18%, respectively. of Drone & Modern Warfare ETF (JEDI) It rebounded by 12%.
If implemented, the Pentagon agreement could aim to increase domestic production and lower costs of unmanned aircraft, a key weapon in modern warfare.
“While not official, we believe this type of financial support is particularly meaningful for Unusual Machines given the importance and supply constraints of drone components and domestic manufacturing capacity,” Needham analyst Austin Bolig told clients in a note Thursday.
The Trump administration is directly acquiring corporate stock on a scale unprecedented in the United States outside of times of economic crisis, war, or other disaster. The administration has focused primarily on industries deemed critical to U.S. national defense, such as critical minerals and semiconductors.
CNBC has reached out to the Department of Defense for comment.
