The article argues that government backing does not guarantee a stock’s price, since investors often bid up shares before the benefits materialize, a premium the author calls the “Washington premium.” It cites Intel Corp. (INTC), where an agreement with the Trump administration includes an $8.9 billion investment for a 9.9% passive stake with no board seat, and MP Materials Corp. (MP), whose Pentagon deal includes a 10-year price floor on neodymium-praseodymium products. The author stresses that such support does not answer normal business questions about execution, competitiveness, earnings and a sensible share price. The piece compares this with the 2008 rescue of Fannie Mae and Freddie Mac, where existing common shareholders bore losses even though the government protected the mortgage market.
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Original headline: Do This Before You Buy Another Trump Stock …
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