Rheinmetall shares plummeted as much as 16% in European morning trading, continuing a volatile trend that has seen the stock lose more than a third of its value since January. While the shares recovered slightly, the market reaction reflects the scale of the lost opportunity. Conversely, shares in rival ThyssenKrupp Marine Systems (TKMS) climbed 10%, pushing the company’s year-to-date gains above 20% as investors pivoted toward the firm offering an alternative MEKO A-200 combat frigate.

Reports from Der Spiegel and the Financial Times suggest the cancellation of what would have been the largest naval project in German history. J.P. Morgan analysts warned that the loss makes it unlikely Rheinmetall will hit its 80-billion-euro order target for the year, as the project accounted for roughly 12 billion euros of expected intake. CEO Armin Papperger had previously identified the deal as a cornerstone of the company’s growth, with hopes to finalize the contract by the second quarter. Neither the German defense ministry nor Rheinmetall has provided an official statement, while a spokesperson for TKMS noted they have received no formal notification of the government’s final decision.