Market darling brought to earth by sell-offs and exit
Just weeks ago, defense technology innovator DroneShield caused an AI boom in the local stock market after launching new software.
Fast forward to November, and we saw the Australia-based firm lose more than 70 percent of its share value, with executives either leaving without notice or losing their shares in the company worth millions of dollars.
DroneShield describes itself as “the only publicly traded company specifically dedicated to the rapidly growing counter-UAS (uncrewed aerial system) sector” and specializes in using artificial intelligence to detect and destroy threats from drones.
Listed in 2016, the company traded steadily until early 2024, when conflicts in the Middle East and Ukraine reignited interest in drone protection and shares rose tenfold.
This demand continued into 2025, with shares rising to $6.60 on October 9, but have been declining since then.
Over the last two weeks DroneShield has consistently hit the headlines following a series of worrying developments for investors and the ASX as a whole, with shares trading at $1.88 on Thursday afternoon.
On November 10, CEO Oleg Vornik told investors that DroneShield had signed a contract with the US government for a total of $7.6 million, only to make an embarrassing withdrawal hours later.
“DroneShield advises that November contracts do not represent new orders,” Mr. Vornik said in the announcement.
“November contracts were incorrectly marked as new contracts rather than revised contracts due to an administrative error.”
Two days later, it emerged that Mr Vornik – along with chairman Peter James and director Jethro Marks – had sold $70 million worth of DroneShield shares, including more than $2 million before the false contract information was withdrawn.
Questioned by the exchange operator on Thursday, DroneShield rejected any suggestion that the trio had timed their sale or even said they planned to sell to the company.
The latest dagger in the firm’s share price trajectory was the unexplained resignation of US CEO Matt McCrann on Wednesday, leading to a further 20 per cent drop in the share price.
Uncertainty is scaring away investors looking to reduce risk in their portfolios, a leading analyst says.
“We were given little reason for the US president to suddenly resign, which never bodes well for a company,” Moomoo analyst Michael McCarthy told AAP.
“The market is to some extent its own worst enemy here; perhaps it never deserved to be this high, but it’s certainly an extremely volatile stock.”
DroneShield hopes it can regain some of the ground lost as the global AI revolution continues apace.
But investors may need some reassurance that the firm is on track before trust can be restored, observers say.
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