Investors fear soaring small cap DroneShield could come crashing back to earth
Australia’s hottest defence stock is capitalising on its soaring share price to raise fresh cash, but there are concerns it may have overshot its fundamentals.
Defence tech small cap DroneShield may have experienced strong demand from institutional investors for its $75 million equity raise this week. But not all fund managers are convinced about the future trajectory of the high flying stock.
DroneShield shares are up nearly 200% this year off the back of strong support from the retail investment community as escalating conflicts in Ukraine and Middle East heighten interest in defence tech.
Although the stock is popular among retail investors DroneShield's CEO Oleg Vornik told Capital Brief in February that the company had fielded interest from "number of institutions" about investing in the business.
That is now set to transpire with the company launching a $75 million equity raise through Shaw and Bell Porter on Thursday — including a $70 million fully-underwritten institutional placement.
