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There's a conspiracy theory going around about someone dumping Lockheed Martin stock right before Trump's tweet caused it to tank

Dec 15, 2016, 20:46 IST

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Win McNamee

On Monday, President-elect Donald Trump tweeted that Lockheed Martin's next generation fighter jet F-35 program was "out of control" with costs running far too high.

Following the tweet, the share price of Lockheed's stock dove as much as 5%, wiping out more than $4 billion off of the company's market cap.

As some sharp eyed observers have noted, it appears that this selling may have preceded the tweet from Trump. Trump's tweet came at 8:26 a.m. ET, and there appeared to be a move down in the stock price some time around 8:08 a.m.

Israeli journalist Amichai Stein noted the discrepancy in a tweet that has been shared over 11,000 times (he later retracted the tweet but that clarification only got retweeted 4 times) and a number of people online have seized on the idea it was an inside job.

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This, however, is a conspiracy theory at best.

For one thing, Trump mentioned the F-35 program during an interview with Chris Wallace on Sunday evening, saying it was also overpriced at that time. So it is likely that some selling would happen pre-market due to those comments.

Additionally, the stock was downgraded at Zach's Investment Research at 8:02 a.m. ET and a number of headlines that factor into Bloomberg's social sentiment index turned negative on Trump's Sunday night comments, which could have triggered algorithmic trading programs to sell the stock.

In response, there was some selling volume around 8:08 a.m. ET according to Bloomberg data, roughly 869 shares but the number of shares sold was incredibly small. For reference, once the market opened Lockheed was trading roughly three-quarters of a million shares a minute.

Much of the trading done on the market nowadays is run by computers that take in massive amounts of data and trade independently of human input. The other problem here is that much of these moves came pre-market when liquidity is limited and the algorithmic trading selling can be magnified in its impact.

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So yes, there was some selling in the market before Trump's tweet about Lockheed Martin, but to think it was an insider or - in the most extreme case of this conspiracy theory - Trump himself is a pretty large stretch.

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