Why AeroVironment Stock Dropped Today

• Space Force conscionable slapped a halt enactment bid connected AeroVironment's BADGER abstraction radar project.

• If the declaration continues astatine all, it volition person to beryllium fixed-price.

• 10 stocks we similar amended than AeroVironment ›

AeroVironment (NASDAQ: AVAV) banal tumbled 4.7% done 10:50 a.m. ET Tuesday, and it's not hard to fig retired wherefore ... though AV isn't making it easy, and you bash person to bash a small digging:

This morning, the U.S. Government "issued a halt enactment bid connected the Company's Other Transaction Agreement for the transportation of BADGER phased array antenna systems to enactment the Satellite Communication Augmentation Resource ("SCAR") program."

AeroVironment announced it won this declaration successful a large property merchandise past September, clarifying that the U.S. Space Force Space Rapid Capabilities Office is its customer, and that BADGER volition beryllium utilized for "satellite tracking, telemetry, and control."

AV promised to "deliver the archetypal BADGER portion to the Space Force successful the coming months, with much units nearing completion for transportation successful aboriginal 2026 to enactment full-scale overseas deployment."

AeroVironment was little expansive successful advertizing its atrocious news. Instead of issuing a property release, AV disclosed the authorities enactment successful an SEC 8-K filing. And AV spun the quality arsenic champion it could:

"The halt enactment bid allows for the parties to negociate an amended statement for the aboriginal of the SCAR programme ... which amendment is expected to beryllium a firm-fixed terms agreement" -- truthful there's inactive anticipation the declaration volition continue.

So what's the upshot here? BADGER's connected the ropes. It whitethorn oregon whitethorn not survive.

How atrocious volition it beryllium for AV if BADGER does not resume? That's hard to say. The institution hasn't disclosed the contract's value. The notation to a "firm-fixed terms agreement" implies the archetypal declaration was "cost-plus," truthful adjacent if the declaration continues, it mightiness make smaller nett margins for AeroVironment.

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