New York, Jan 14, 2026, 13:08 ET — Regular session
- L3Harris said the Pentagon plans a $1 billion convertible preferred investment tied to a 2026 Missile Solutions IPO
- The deal would make the U.S. government an anchor investor in a solid rocket motor supplier
- L3Harris also disclosed a Navy and Marine Corps award for 34 T7 explosive-ordnance-disposal robots
L3Harris Technologies shares rose on Wednesday after the defense contractor said the Pentagon would invest $1 billion in its Missile Solutions business, ahead of an initial public offering planned for the second half of 2026. L3Harris said the investment would come via a convertible preferred security that would automatically convert into common equity after the IPO, while L3Harris would keep control. (L3Harris® Fast. Forward.)
The arrangement matters because it puts the government directly into the capital stack of a critical munitions supplier — a rare step for the Pentagon — as it tries to push more output through strained production lines. “This equity position allows the American people to share in its future success,” Michael Duffey, the department’s top acquisition and sustainment official, said at a reporter roundtable, according to Breaking Defense. (Breaking Defense)
National Defense Magazine reported the Pentagon signed a letter of intent for the investment, pending congressional approval, and framed it as a “direct-to-supplier” partnership that could support multi-year procurement framework agreements for solid rocket motors. Solid rocket motors are the engines that power many missiles. (National Defense Magazine)
L3Harris stock was up about 0.5% at $342.95 in afternoon trading, while Lockheed Martin gained about 2.3% and Northrop Grumman rose about 3.1%. RTX added about 0.9% and General Dynamics was little changed.
Defense News said the Pentagon expects the funding to help expand capacity, modernize facilities and improve “industrial resilience,” and that the money would come from its Industrial Base Analysis and Sustainment authority. The outlet also reported L3Harris told investors the government would not take board seats or steer day-to-day operations. (Defense News)
Some analysts are already circling the second-order questions. Washington Technology cited Capital Alpha analyst Byron Callan as asking why public money is flowing to L3Harris and how conflicts of interest would be avoided if the government seeks a return to taxpayers. (Washington Technology)
Still, the trade is not clean. The company is pitching a complex set of transactions into a market that can turn on IPO windows, budgets and headline risk, and the Pentagon itself has said scaling production will hinge on congressional approval and appropriations.
Separately, L3Harris said it received an award to provide the U.S. Navy and Marine Corps with 34 large T7 robots for explosive ordnance disposal missions, with deliveries under the multi-year contract scheduled to begin this year. “Recognized by both the Navy and Marines for outstanding dexterity and performance, L3Harris T7 robotic systems will provide them a significant advantage,” Dave Kornick, president of Intelligence and Cyber, Space and Mission Systems, said. (L3Harris® Fast. Forward.)
Investors now turn to details that are not yet nailed down: the timing of definitive documents, the size of any follow-on capital needs, and what the new Missile Solutions entity looks like once it is priced for public markets.
L3Harris is due to report fourth-quarter 2025 results before the U.S. market opens on Jan. 29, with an earnings call scheduled for 10:30 a.m. ET that day. (L3Harris)
