A change in Twitter account verifications creates chaos for the image of major companies, including Bethesda's own Lockheed Martin.
By Donte Kirby – Staff Reporter, Washington Business Journal
Nov 14, 2022
Lockheed Martin Corp. was among the latest corporate brands to take a massive stock hit following misinformation and fake accounts on Twitter after the latter's new verification system — which allows anyone to buy a blue check mark for $8 a month — went into effect.
The Bethesda defense contractor saw its company shares drop 5.5% by close of business Friday, cutting short a steady rise in stock price for the last month. Friday's slock slide followed a tweet sent Thursday night from a fake account, @LockheedMartini, verified through the monthly $7.99 blue check offering and bearing a similar logo, that the company would halt weapon sales to countries like Saudi Arabia and Israel, pending further investigation into their human rights records. That Twitter account has since been suspended.
Lockheed (NYSE: LMT), whose official Twitter handle is @LockheedMartin, has not publicly addressed the fake tweet. We reached out to the company for comment and will update this when we hear back.
Its stock, which closed Thursday at $490.77 a share, not far from the company's 52-week high, had fallen to a closing price of $463.86 on Friday, as trading volume nearly doubled. That equated to roughly $7 billion worth of lost value, based on the company's outstanding shares listed in its most recent quarterly report released Oct. 18.
During Monday's trading, the company had earned back about 0.39% of its stock value, as shares reached $465.12 by late afternoon. It carried a $122.09 billion market cap as of then.
Direct causation or correlation with the fake tweet is hard to tell. Defense contractors have been hit with other issues that have caused its stock to dip in recent weeks — supply chain issues are real, and in the wake of the midterm elections, the Defense Department's fiscal 2023 budget is still up in the air as a Dec. 16 deadline for the current continuing resolution looms.
Lockheed, which has encountered some issues with its F-35 deliveries, was enjoying a stock bounce after disclosing stronger third-quarter earnings, with a 190% jump in net earnings to beat Wall Street expectations. That had followed a rougher second quarter, when it had fallen short of Wall Street's projections, with a 83% year-over-year drop in quarterly net earnings and 9.3% drop in quarterly revenue.
For the first nine months of this year, Lockheed generated $2.6 billion worth of sales across its main divisions to countries and entities in the Middle East, comprising about 5.5% of its total sales for that period.
Though, Lockheed was among a handful of prominent brands that fell victim to Twitter's $8 verification fiasco. A parody account with the handle @EliLillyandCo, an apparent attempt to ape pharmaceutical giant Eli Lilly & Co. (NYSE: LLY), sported the company logo and a blue check and tweeted that it was supplying its insulin product line for free.
Eli Lilly issued its own tweet and apology from its official account, @LillyPad, on Friday afternoon. "We apologize to those who have been served a misleading message from a fake Lilly account. Our official Twitter account is @LillyPad."
By then, that company had seen its stock end the day at $352.30 per share, down 4.5% from $368.72. It saw a 2% rebound to $358.70 by late Monday afternoon.
PepsiCo, Nestle and Elon Musk’s own Tesla and SpaceX also saw shares dip amid the fake verification tweetstorm.
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