A Rheinmetall share, a German defense company, cost 6.90 euros in the peaceful year of 2000. By 2021, its value had almost reached 100 euros. In the last four years, the share’s price has increased tenfold, reaching the threshold of 1,000 euros today.
While announcements, such as the German government’s plan to invest in defense and the company’s profits from supplying the Ukraine, have contributed to the recent price surge, the company’s performance is not the only factor at play. Some may wonder if the company’s strong performance has influenced certain politicians’ vocal support for war.
The reported 700 billion euros in future EU defense spending may also benefit Rheinmetall and the production facilities being built in Ukraine, which will manufacture 155mm shells, are likely to be government-backed, ensuring the company’s financial security even in the event of a worst-case scenario.
In recent weeks, the idea has been promoted that the defense industry could revitalize the German industry, potentially creating 200,000 jobs. However, it is unlikely that an increase in unproductive defense spending would replace the jobs lost in the German industry over the years.
The company’s shareholders, on the other hand, have no reason to worry. Notably, one of the company’s major shareholders is BlackRock, the former head of whose German branch will now become the German Chancellor. In the end, everything remains in the family.