The Pentagon's Smart Move: Why It Chose Leverage Over Shares

The Pentagon recently made a clever choice. Instead of buying common stock in L3Harris Technologies, it opted for a more strategic investment.

A $1 Billion Bet on Preferred Stock

• Preferred stock offers downside protection and potential gains.
• Unlike common stock, it reduces market volatility risks.
• The Pentagon structured the deal to win big if successful and lose less if not.

Why Missiles?

• Global conflicts have increased demand for missiles.
• Supply is lagging, so the Pentagon created a standalone missile unit to speed up production and cut bureaucracy.

Smart Investing, Not Politics

• Defense procurement is often slow and cumbersome.
• Convertible preferred stock provides immediate capital, aligns interests, and avoids overpaying for long-term equity.
• The Pentagon acted more like a hedge fund than a regulator.

The Takeaway

• Missiles are now strategic infrastructure.
• L3Harris is at the heart of this shift.
• For investors, the message is clear: missiles are a priority.