New York, Jan 14, 2026, 13:08 ET — Regular session
- L3Harris revealed the Pentagon is eyeing a $1 billion convertible preferred stake linked to a 2026 Missile Solutions IPO
- The deal positions the U.S. government as a key investor in a solid rocket motor supplier
- L3Harris revealed a contract from the Navy and Marine Corps for 34 T7 explosive-ordnance-disposal robots
L3Harris Technologies shares climbed Wednesday after the defense contractor announced the Pentagon would pump $1 billion into its Missile Solutions unit. The funding comes ahead of a planned IPO in the second half of 2026. The investment will take the form of a convertible preferred security that automatically converts into common stock after the IPO, with L3Harris retaining control. (L3Harris® Fast. Forward.)
The deal is significant because it places the government directly in the capital structure of a key munitions supplier — an unusual move for the Pentagon — as it seeks to ramp up output amid stretched production lines. “This equity position allows the American people to share in its future success,” said Michael Duffey, the department’s top acquisition and sustainment official, at a reporter roundtable, according to Breaking Defense. (Breaking Defense)
National Defense Magazine reported the Pentagon has signed a letter of intent for the investment, contingent on congressional approval. They described it as a “direct-to-supplier” deal that might back multi-year procurement framework agreements for solid rocket motors. These motors serve as the engines for many missiles. (National Defense Magazine)
L3Harris shares climbed roughly 0.5% to $342.95 in afternoon trading. Lockheed Martin edged higher by about 2.3%, with Northrop Grumman up around 3.1%. RTX ticked up 0.9%, while General Dynamics held steady.
Defense News reported the Pentagon plans to use the funding to boost capacity, modernize facilities, and enhance “industrial resilience,” drawing on its Industrial Base Analysis and Sustainment authority. The outlet also noted that L3Harris has assured investors the government won’t claim board seats or interfere with daily operations. (Defense News)
Some analysts have begun to probe deeper. Washington Technology reported that Capital Alpha’s Byron Callan questioned the rationale behind public funds going to L3Harris and raised concerns about potential conflicts of interest if the government aims to recoup money for taxpayers. (Washington Technology)
Still, the trade isn’t straightforward. The company is pushing a complicated deal into a market sensitive to IPO timing, budget cycles, and headline risks. On top of that, the Pentagon has made clear that ramping up production depends on congressional approval and funding.
In a separate announcement, L3Harris revealed it secured a contract to supply the U.S. Navy and Marine Corps with 34 large T7 robots designed for explosive ordnance disposal. Deliveries under this multi-year deal are set to start later this year. “Recognized by both the Navy and Marines for outstanding dexterity and performance, L3Harris T7 robotic systems will provide them a significant advantage,” said Dave Kornick, president of Intelligence and Cyber, Space and Mission Systems. (L3Harris® Fast. Forward.)
Investors are shifting focus to unresolved details: when the final documents will drop, how big any follow-on capital requirements might be, and the shape of the new Missile Solutions unit once it hits public markets.
L3Harris will release its fourth-quarter 2025 results before the U.S. market opens on Jan. 29. The company has scheduled an earnings call for 10:30 a.m. ET that same day. (L3Harris)
