Why is the DroneShield share price crashing 13% on Wednesday?

The DroneShield Ltd (ASX: DRO) share price is getting clobbered today.

Shares in the S&P/ASX 200 Index (ASX: XJO) drone defence company closed yesterday trading for $2.81. In early afternoon trade on Wednesday, shares are changing hands for $2.46 apiece, down 12.5%.

For some context, the ASX 200 is down 0.1% at this same time/

Here's what's happening.

Why is the DroneShield share price getting hit today?

If you own DroneShield stock this week, you'd do well to take a Dramamine to help settle the motion sickness.

Here's what I mean.

On Monday, the ASX 200 defence stock closed up 10.6% even as the ASX 200 sank 0.7%.

Then yesterday, the DroneShield share price closed up a whopping 22.2%, again flying against the 0.4% retreat in the ASX 200.

That put the share price up 35.1% in just two days.

With no fresh price sensitive news out from the company that would be likely to stir investor angsts, today's sharp sell-down then looks to be driven by some healthy profit taking.

Why did investors pile into the ASX 200 drone defence stock on Tuesday?

The huge uptick in the DroneShield share price on Tuesday followed the announcement of a new contract with an European military customer.

The company expects all deliveries and payments for the $49.6 million contract to be finalised in the first quarter of calendar year 2026.

The unnamed customer was said to be a longstanding European reseller for a military end-customer who is buying handheld counter drone systems, alongside the associated accessories and software updates.

And investors reacted favourably to news that a large part of the that contract order is ready to ship. Management noted that this will allow the company to make the delivery early next year and help boost DroneShield's cashflow.

What else has been impacting the DroneShield share price?

Despite today's fall, the DroneShield share price remains up an impressive 304.1% since this time last year.

But things might have gone even better for stockholders, if not for early November's big share sale by a number of the company's top executives, crucially including CEO Oleg Vornik.

Between 6 November and 12 November, Vornik sold 14.81 million shares in the company he spearheads. Those share sales netted Vornik a very a tidy $49.47 million.

When that news hit the wires on 13 November, ASX investors were quick to join in with the selling.

By the time the smoke cleared, the DroneShield share price had crashed 31.4% on the day.

Like I said up top, a little Dramamine may not be out of order for longer-term stockholders.

The post Why is the DroneShield share price crashing 13% on Wednesday? appeared first on The Motley Fool Australia.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended DroneShield. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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