Red Cat Holdings Falls After Fuzzy Panda Shorts Stock Over Alleged Drone Misrepresentation
Synopsis
The firm alleged Red Cat overstated the size of a key Army contract by roughly 60% and misrepresented its new drone, FANG, as a market-ready product.
Short seller Fuzzy Panda said Friday it is short Red Cat Holdings (RCAT), citing misleading claims by the drone maker.
The firm alleged Red Cat overstated the size of a key Army contract by roughly 60% and misrepresented its new drone, FANG, as a market-ready product. Images reportedly show FANG built with Chinese parts and components from an older drone.
Fuzzy Panda also noted that RCAT drones have been listed in NATO’s catalogue for nearly two years without generating meaningful sales. It stated that the company’s stock had surged on investor optimism over the Army contract and the new FANG product, which occurred right after management promised investors the Army deal would allow them to hit guidance.
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