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DroneShield Ltd (DRO)

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Question asked 15/11/2025

DroneShield Ltd (DRO)

No doubt I won't be the only one this week. What the f**k is going on with Droneshield? Even in spite of their 10th November announcement gaffe, the company is still winning contracts with more in the pipeline. Why have they been sold off so heavily? - David I am a seasoned SMSF Trustee with a reasonable portfolio and years of trading experience so I am used to the machinations of the share market. However, as a DRO shareholder, one event has completely rocked me, and that is the sell down of Droneshield (DRO) shares by Directors of the company - AFTER HOURS!! I quote - "Droneshield disclosed three director transactions at 7:18 pm, 7:20 pm and 7:21 pm last night, including: Non-Executive Director Jethro Marks disposed 1.46m shares ($4.8m), representing his entire shareholding (ex-unlisted and vested performance options) CEO Oleg Vornik sold 14.8m shares ($49.4m), same pattern as Marks and only holds (193k+709k unlisted and unvested performance options) Non-Executive Chairman Peter James sold 3.68m shares ($12.3m), also same as the above My understanding is that in Australia between 4.10pm and 5pm, there is the ‘Adjust‘ phase. There is no trading allowed, but brokers are allowed to amend orders or cancel unwanted orders. This is nonetheless a distinct phase from the ‘Close’ phase that kicks in formally at 7pm when even this is not allowed to take place" To add salt to wounds of "ordinary" shareholders, at 12 midday the following day, DRO is down 33% - quite a handy after hours sale wouldn't you say!! A good call by Directors? A coincidence? Unfair advantage? Can you please explain how this happens? Brian Droneshields 30% drop in a day? What is the reason for this and when something like this happens, where can I find information on the member's site? Thanks Rosyln Just interested in your views on Droneshield given the recent sales by Company Insiders. Is DroneShield a Buy? Jeremy.

Answer

Hi Guys,

A few questions here but basically all the same thematic = what’s happening with DRO, down ~34% on Thursday afternoon!

The first and simple answer is when these dramatic moves occur, especially if they occur with stocks MM owns, go to the MM Blog under the Media Tab on the MM Website. We try to update these when/if required when practical.

Moving onto the dramatic ~30% plunge by DRO on Thursday:

Oleg Vornik sold 14.8 million shares between Nov. 6 and Nov. 12, also, Chairman Peter James and non-executive director Jethro Marks also offloaded shares amounting to $12.4 million and $4.9 million, respectively. The shares were not actually traded after-hours, the announcement of the sales were released then. Under ASX Listing Rules, a listed entity must notify the ASX of any change in a director’s holding within five business days after the change occurs. It was a sneaky time to put through the notice, but allowable.

The shares related to performance rights vesting and then conversion/exercise into ordinary shares by 5 November.

No wonder the stock was whacked – shareholders listen to senior management espouse the great future of the business, to then see them flog all of their shares at the first available opportunity.

That said, lets put ourselves in the CEO’s position for a moment. Having taken the reins in 2017 on a base salary of ~$A190k per year when shares were trading at 20c (market cap around ~$20m), he has been responsible for significant valuation creation ($2.1bn market cap on Friday) – it had been over ~$4bn before recent weakness. $20m to $2bn – a huge uplift.

Our understanding is, that all of his net worth was tied up in the stock. He had sold ~$11mn of stock in the past, and has now just taken $50mn. For the huge success DRO has had, arguably, the CEO should be getting a big pay day.

Obviously, the selling of the entire stake is the issue, and as soon as the shares vested to boot. Discussing this in the office on Friday, the question was thrown around – what would you do? While we can understand the markets reaction, we also have some sympathy for the CEO, getting paid for what he has built.

The markets reaction would have been amplified by 3 directors making the same decision. In any case, DRO now looks a lot more attractive to us after the big washout. If they are the real deal – as it seems, and if we believe the sales are more about personnel wealth than a sign of looming issues, current growth rates will see DRO trading sub 30x earnings on FY26 consensus numbers. No doubt, DRO will be doing the rounds next week to try and assure the market that everything remains on track.

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DroneShield Ltd (DRO)

LAST UPDATED 13/11/2025 16:39

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