Rheinmetall AG (RHMG.DE) shares tumbled approximately 17% in early Tuesday trading, marking one of the steepest single-day declines for the German defense giant in recent memory.
The sell-off was triggered by mounting reports that the German government is preparing to cancel the F126 frigate program, a cornerstone project for the Düsseldorf-based arms manufacturer.
The F126 program, designed to replace Germany’s aging Type 123 frigates, had been viewed as a critical long-term revenue driver for Rheinmetall.
The company had positioned itself as a key industrial partner, expecting significant contracts for weapons systems, combat management, and other naval technologies.
The potential cancellation represents a severe disappointment, stripping away a high-profile order that was central to the firm’s strategic outlook.
Market participants reacted swiftly to the news, interpreting the development as a direct threat to Rheinmetall’s earnings pipeline.