Shares of drone developer Draganfly Inc (NASDAQ:DPRO) are falling sharply Friday morning, reversing following this week’s rally. The sharp pullback follows the company’s announcement of a new stock offering.
What To Know: On Thursday, DPRO shares surged after the company revealed its Commander3 XL drone was selected by a key U.S. Department of Defense branch for intelligence and surveillance operations. The positive momentum was amplified when H.C. Wainwright analyst Scott Buck reiterated a Buy rating and nearly doubled the firm's price target on the stock to $6 from $3.50.
Before the market opened Friday, Draganfly announced a deal with institutional investors to raise approximately $25 million. The company is selling 4,672,895 units at a price of $5.35 per unit. Each unit includes one common share and one purchase warrant.
This capital raise, while intended to fund growth and general corporate purposes, creates shareholder dilution. The offering price represented a steep discount to Thursday’s close, triggering a sell-off as the market digests the influx of new shares. The offering is expected to close on or about July 21.
Price Action: According to data from Benzinga Pro, DPRO shares are trading lower by 27% to $5.28 Friday morning. The stock has a 52-week high of $7.30 and a 52-week low of $1.55.
Read Also: A ‘Swiss Army Knife’ For The Military? Here’s Why Draganfly Stock is Taking Off
How To Buy DPRO Stock
By now you're likely curious about how to participate in the market for Draganfly – be it to purchase shares, or even attempt to bet against the company.
Buying shares is typically done through a brokerage account. You can find a list of possible trading platforms here. Many will allow you to buy “fractional shares,” which allows you to own portions of stock without buying an entire share.
In the case of Draganfly, which is trading at $7.22 as of publishing time, $100 would buy you 13.85 shares of stock.
If you're looking to bet against a company, the process is more complex. You'll need access to an options trading platform, or a broker who will allow you to “go short” a share of stock by lending you the shares to sell. The process of shorting a stock can be found at this resource. Otherwise, if your broker allows you to trade options, you can either buy a put option, or sell a call option at a strike price above where shares are currently trading – either way it allows you to profit off of the share price decline.
