Bell Potter Says DroneShield Is Now “Dead Money” After CEO Exit

A Sudden Shift in the DroneShield Story as Executives Cash Out

“When the world wakes up to a theme, it rarely does it slowly.” Whether you are a long term investor in DroneShield (ASX: DRO) or someone looking at the company for the first time, one thing stands out. Momentum in this stock shifts quickly, and today’s 10% drop is another reminder of that. The fall follows the resignation of Matt McCrann, the CEO of US operations, which landed only recently after a wave of insider selling. CEO Oleg Vornik sold 49.5 million shares, while chairman Peter James sold A$12M and director Jethro Marks sold A$5M, bringing the total to roughly A$67M in stock sold by key insiders.

The AFR has suggested Oleg sold part of his stake to fund a property purchase in North Sydney, but the timing is still difficult to ignore. The CEO departure, combined with the insider selling and a recent ASX announcement that needed to be corrected after the market interpreted it as new contract wins, has created an environment where sentiment can swing hard in both directions.

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Bell Potter had some words to say

DroneShield’s house broker, Bell Potter, has taken a firm view on the recent events. They argue that the combined A$70M share sale from the CEO, chairman, and a director has effectively shut the door on institutional interest for now. Their institutional sales desk went as far as calling the stock “dead money” for the rest of the year, meaning the large funds are unlikely to add risk until confidence is rebuilt. It is not hard to see why. A CEO stepping down immediately after A$67M in insider selling is exactly the type of signal that the market reacts to aggressively.

In Bell Potter’s view, DroneShield is likely to trade sideways as institutions wait for the dust to settle and for the company to reestablish momentum through clean execution and new contract wins.

Fibre-Optic FPV Drones Emerge, but DroneShield’s Core Counter-UAS Advantage Remains Intact

There are emerging concerns regarding the competitive edge that DroneShield holds in modern warfare, particularly in the evolving counter-drone landscape. Both Russia and Ukraine have been rapidly adapting their battlefield tactics, and a notable development is the accelerated manufacturing of fibre-optic-guided FPV drones. Russia began pioneering this technology in 2024, and Ukraine has since caught up.

These fibre-optic drones represent a meaningful shift because they are immune to traditional radio-frequency jamming, the core mechanism behind systems such as DroneShield’s DroneGun. Since fibre-optic control relies on a physical tether rather than RF communication, standard electronic warfare (EW) countermeasures have limited effect.

However, it is important to emphasise that these drones do not yet represent the majority of battlefield UAV hardware. Estimates from analysts (e.g., Samuel Bendett/CNA, ISW, Ukrainian MoD) and frontline reports put them at roughly 10–30% of total FPV strikes. The vast majority of drones deployed in Ukraine, and in other conflict zones, remain radio-frequency operated, where DroneShield’s technologies continue to retain relevance and tactical value. While fibre-optic FPV drones pose a new and specialised challenge, they do not currently undermine DroneShield’s broader competitive position in the mainstream counter-UAS market.

Institutes run for the hills

DroneShield is not suddenly obsolete in terms of its technology; the core tech is evolving into layered, AI-driven platforms that address even fibre/autonomous threats. The stock crash is majority self-inflicted (insider selling + comms errors + leadership exit) in a momentum name that ran too far too fast.

Institutional pessimism will likely dominate the near term, but long term investors know that institutions do eventually return as long as the fundamentals stay intact. It will not happen quickly. It will require new contract wins, a credible US based CEO appointment, and a stretch of clean execution. For now, the stock is being driven more by emotion than fundamentals. The long-term defence thesis is still intact, yet sentiment has taken a hit. Momentum has faded. Institutions have stepped back. But they will come back if the company delivers on the next phase of its growth.

This selloff does not break the business model. It resets the valuation and flushes out weaker hands after an extraordinary run. What does stand out is that internal governance needs attention. The recent decisions have been loose, poorly timed, and damaging to market confidence, and DroneShield’s leadership will need to address this if they want credibility to return.