Why Is Drone Maker Red Cat’s Stock Sliding Over 8% Premarket?

Red Cat said it plans to use net proceeds from an offering to invest in its new unmanned surface vessel division.

Red Cat (RCAT) stock dipped 8.3% in premarket trading on Thursday after the drone maker launched a proposed public offering of its shares.

Northland Capital Markets is acting as the only bookrunner for the offering, Red Cat said. In connection with the offering, the company also expects to grant the underwriter a 30-day option to purchase up to an additional 15% of the shares of common stock offered in the public offering.

Red Cat said it plans to use net proceeds from the offering for general corporate and working capital purposes, including investments related to its new unmanned surface vessel division.

Retail sentiment on Stocktwits about Red Cat was in the ‘bullish’ territory at the time of writing.

The company had unveiled its expansion into unmanned surface vessels in May, and plans to begin production of a seven-meter-long expeditionary multi-role vehicle by the end of the third quarter. Red Cat had said that the vehicle is developed to meet the demands of high-speed, long-range, kinetic maritime operations, and it will deliver larger payloads, have extended endurance, and increased firepower.

The U.S. Navy is moving away from manned boats toward autonomous vessels, as it looks to assert its presence in the Pacific amid alleged Chinese aggression against several neighbors.

“OpEx means infra[structure] and inventory. Seems like a big opportunity to scale boats. I’m stoked about this,” one user wrote.

Last week, Red Cat revealed that the Black Widow System, developed by its subsidiary Teal Drones, has been approved and added to the NATO Support and Procurement Agency (NSPA) catalogue.

This designation enables NATO member nations and eligible partners to procure the Black Widow through NSPA-managed channels, including direct catalogue ordering and sponsored tenders.

Red Cat stock has fallen 12.6% this year. Last month, the company was attacked by a short seller, who accused the company of engaging in paid stock promotions.

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