DroneShield shares tank again as investor call abruptly cancelled

DroneShield shares are once again under pressure after the company abruptly cancelled an investor call on Friday.

Key points
  • DroneShield shares are again under pressure after a broker call was cancelled.
  • The company this week lost a key US-based executive.
  • DroneShield has also had to explain why three directors sold large tranches of shares.

Shares in DroneShield Ltd (ASX: DRO) have spent another day deep in the red after the technology company abruptly cancelled an investor call scheduled for Friday.

The stock fell as much as 12.2% to $1.66 on Friday before recovering to be changing hands for $1.74, down 7.8%, and well below the close last Friday of $2.33.

The shares are now trading at levels last seen in June, after hitting a high of $6.70 in October on strong news flow from the anti-drone technology company.

A silhouette of a soldier flying a drone at sunset.

Image source: Getty Images

News flow turns sour

But the news in recent weeks has arguably been bad, confusing, and negative, with the company releasing a statement about contract wins which had already been released to the market, followed by the news that three of its directors had sold $70 million worth of shares. The company also this week announced its US Chief Executive was leaving the company.

The Australian Financial Review reported on Friday that Bell Potter, which the AFR pointed out had helped DroneShield raise $220 million last year, had organised a broker call, asking investors on Thursday to submit questions ahead of time.

The call was then cancelled on Friday morning, the AFR said.

Shares sales explained

DroneShield published a lengthy explanation to the ASX on Thursday regarding the share sales by its directors, which included Chief Executive Officer Oleg Vornik selling down a 14.81 million share stake.   

The company said that on 4 November, the vesting conditions for more than 44.4 million options had been met, and on 5 November, 31.2 million of these options were exercised.

The company said that investors in the company could have foreseen the share sales.

As it said:

The market was fully informed that the three directors had exercised performance options and were able to sell the DroneShield shares received on exercise. It is DroneShield's belief that persons who commonly invest in securities would understand that the exercise of the performance options would crystallise the sale of a material proportion of the shares issued in order to meet the tax liability for each of the three directors and other employees arising from the exercise.

The company said it was not aware of any agreement between the three directors to sell their shares at the same time.

The company added:

DroneShield has been informed by the directors that they did not have an agreement to dispose of all (or any part) of their DroneShield shares, and that the shares were sold on-market, in the ordinary course of trading, and in accordance with programmed trading parameters agreed by each director with their broker.

DroneShield's market capitalisation has fallen from a level greater than $6 billion last month to $1.71 billion at the close of trade on Thursday.

Motley Fool contributor Cameron England has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended DroneShield. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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