Force Protection Surges 30% on CEO Message (FRPT)
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Force Protection, Inc. (Nasdaq: FRPT) has recently come under extremely heavy pressure. Shares of Force Protection are down about 60% year-to-date and have begun to slide more intensely over the last several months as a result of negative rumors that have been heard around Wall Street.
On November 30, shares took a 20% hit, dropping from about $15 to $11 after the U.S. Marine Corp released a report suggesting it may need to cut requirements on mine resistant ambush protected (MRAP) vehicles, Force Protection's main business. On December 10, the stock sunk about 23% on rumors that the U.S. Army might not need 10,000 MRAP's in Iraq. Then, on Wednesday of this week, the stock took another 20% hit as a result of so much negative sentiment and seemingly validating these earlier claims was a Stanford analyst report starting coverage on Force Protection at Sell with a $5 price target.
Attempting to come to the rescue today, Force Protection's CEO, Gordon McGilton, released a message on the Company's website responding to the recent "misinformation about the Company". Investors have responded extremely well to the message, sending shares climbing by almost $2, or about 43% in just the first two hours of trading.
Some interesting concepts pointed out by Mr. McGilton in the message included:
- Force Protection has over $60 million in liquid assets, with virtually no debt.
- according to McGilton, "no other contractor in our industry develops vehicles faster, or makes more efficient use of capital..."
- Force Protection's MRAP vehicles, the Buffalo, Cougar, and new Cheetah, allow armed forces to save many lives as "tactical wheeled vehicles" are not yet armored to take large scale blasts and "until MRAP vehicles are integrated into all service units in significant numbers, the attacks will persist."
- the Company's joint venture with General Dynamics Land Systems branch, called Force Dynamics, "produces more MRAP vehicles in one month (300 +) than Force Protection delivered in all of last year (2006: 296 total vehicles)."
If these claims are reliable will be understood in upcoming months, but for now, this CEO has apparently appeased his loyal shareholders.
On November 30, shares took a 20% hit, dropping from about $15 to $11 after the U.S. Marine Corp released a report suggesting it may need to cut requirements on mine resistant ambush protected (MRAP) vehicles, Force Protection's main business. On December 10, the stock sunk about 23% on rumors that the U.S. Army might not need 10,000 MRAP's in Iraq. Then, on Wednesday of this week, the stock took another 20% hit as a result of so much negative sentiment and seemingly validating these earlier claims was a Stanford analyst report starting coverage on Force Protection at Sell with a $5 price target.
Attempting to come to the rescue today, Force Protection's CEO, Gordon McGilton, released a message on the Company's website responding to the recent "misinformation about the Company". Investors have responded extremely well to the message, sending shares climbing by almost $2, or about 43% in just the first two hours of trading.
Some interesting concepts pointed out by Mr. McGilton in the message included:
- Force Protection has over $60 million in liquid assets, with virtually no debt.
- according to McGilton, "no other contractor in our industry develops vehicles faster, or makes more efficient use of capital..."
- Force Protection's MRAP vehicles, the Buffalo, Cougar, and new Cheetah, allow armed forces to save many lives as "tactical wheeled vehicles" are not yet armored to take large scale blasts and "until MRAP vehicles are integrated into all service units in significant numbers, the attacks will persist."
- the Company's joint venture with General Dynamics Land Systems branch, called Force Dynamics, "produces more MRAP vehicles in one month (300 +) than Force Protection delivered in all of last year (2006: 296 total vehicles)."
If these claims are reliable will be understood in upcoming months, but for now, this CEO has apparently appeased his loyal shareholders.
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