Short sellers circle DroneShield as it nears 'wild' $2b market cap
The defence tech play, favoured by retail traders, has become 10-bagger in just 12 months and is more valuable on paper than some big ASX names. But sceptical short-sellers are circling.
It was one of the best performing stocks in the All Ordinaries last financial year, gaining a whopping 646%. But the stunning rise in DroneShield has sparked scepticism in sections of the ASX small cap universe.
On Monday the defence tech company closed at a record $2.60 a share, giving it a market cap of $1.98 billion - making its equity more valuable, on paper, than prominent names such as Graincorp, Air New Zealand and Magellan Financial – at least for the time being.
Not everyone is convinced the prise rise is sustainable.
"Its valuation is wild," Rodney Forrest, director of Sublime Funds Management, told Capital Brief.
"Cumulative losses sit at around $40 million. There's been a three times increase in the share count, no change in the profit pool and the insiders sold stock at 70 cents.
