RCAT Sued After Drone Claims Crash

Red Cat said it was ready to soar, telling investors it could pump out “thousands” of drones per month.  But when investors learned that was a bunch of hot air, Red Cat’s stock took a crash landing.  Now, investors are suing.

In 2022, Red Cat execs told investors their Salt Lake City factor was ready for full-scale production.  They also bragged about a massive $260 million Army contract.  But there was some problems with all that bluster.  The factory wasn’t done and Red Cat couldn’t even churn out a hundred drones a month, let alone what the Army needed.

 Then, the real kicker: shortseller Kerrisdale Capital got its hands on the Army contract.  Kerrisdale found it the contract wasn’t worth anywhere close to what Red Cat led investors to believe.  Once investors learned this news, they dumped their shares and Red Cat’s stock crashed 27%.  Now, more investors are joining the lawsuit.