Following the U.S. stock market opening, drone manufacturer Unusual Machines experienced a significant surge, at one point exceeding 100%, due to its association with the Trump family. The stock remains up by 63%, with a market cap slightly over $70 million.
The company announced that Donald Trump Jr., author and investor, joined its advisory board. This news fueled investor interest, as Trump Jr. is the eldest son of former President Donald Trump. According to an updated S-1 filing, Trump Jr. previously owned 331,580 shares but currently holds none. Details on the timing and pricing of these transactions were not disclosed.
Unusual Machines' business heavily relies on Chinese imports for its drone products under the Rotor Riot and Fat Shark brands. The company warned that potential tariffs, as hinted by the recent U.S. presidential election results, could adversely affect operations and lead to increased costs, potentially forcing price hikes and reducing demand.
Financially, Unusual Machines is under pressure, with only $3.56 million in revenue and a net loss of $4.86 million for the first nine months of the year. The company conducted its IPO in February, issuing 1.25 million shares and raising $3.85 million.
Recent trading activity has been intense, with volumes surpassing 47 million shares, compared to an average of 380,000 shares over the past 10 days. The company has 8.3 million outstanding shares.
It's notable that Unusual Machines previously had ties with the Trump Media & Technology Group. In May, the company announced that its auditor, BF Borgers, faced SEC penalties, necessitating a change in auditors for its 2022 and 2023 reports. BF Borgers was also linked with Trump's media group and faced a settlement involving a permanent ban from accounting and a $14 million fine.
