Aaron Kirchfeld

So Candace is one of the biggest defense companies in Europe.

It's a crucial supplier to the war in Ukraine because they make the famous Leopard tank.

And so this is kind of a pivotal moment for the company because until now it's been private, held between the French government and a German family.

But that now has come to a head because the German family wants to sell out after many years as its owner.

And so they've agreed to do a listing after selling a big chunk to Germany to make sure that Germany and France remain the biggest and equal shareholders in the tank maker.

Yeah, that's because yesterday when KNDES finally got to the point where it was ready to announce the launch of its IPO, and this is after almost a year of planning and wrangling between politicians, the German government, unrelated, decided to cancel a huge warship order with Rheinmetall, one of the main KNDES peers.

So the positive investor sentiment around KNDES and the possible IPO has been somewhat overshadowed

by this negative news of a huge order being missed by one of their competitors.

And so there's been so much euphoria around European defense companies.

But in the last several months, that has kind of come down significantly.

So the news yesterday has really brought to the fore the challenges faced by some of the European defense makers.

Of course, it's because, you know, we're in a historical moment where Europe is finally investing hundreds of billions in defense.

And that's largely due to President Trump pressuring NATO members to up their investments and also the European feeling and the reality take that they might not be able to rely on the U.S.

like they did in the past.

So investors obviously want to get on that train because the orders are going up and up and up.

So yesterday we saw a dramatic plunge in Rymotel shares, 19%, which was one of the biggest drops in almost a year.

So what we're hearing is that the valuation expectations, like the rest of the defense market, have come down significantly.

So when we were talking about this IPO almost a year ago, we were talking about ranges of 20 billion euros or more.

Now we're hearing from sources it's gone down to more like 12 to 15 billion euros.

Still a significant amount, but obviously a steep decline.