Red Cat (NASDAQ:RCAT) Shares Experience Gap Up – What You Need to Know

On Thursday, Red Cat Holdings, Inc. (NASDAQ:RCAT) saw its stock price experience a notable gap up before the trading session commenced. The stock had closed at $11.89 and subsequently opened at $12.16. As trading progressed, Red Cat shares were last seen trading at $13.41, with a significant volume of 3,680,875 shares exchanged.

Red Cat Shares Decline 8.6%

Despite the initial gap up, Red Cat shares encountered a decline of 8.6%. Currently, the company has a market capitalization of approximately $982.77 million, a price-to-earnings (P/E) ratio of -26.65, and a beta value of 1.33. The 50-day moving average stands at $6.79, while the 200-day moving average is at $3.86.

Red Cat announced its most recent quarterly earnings on December 16, revealing an earnings per share (EPS) of ($0.18). This figure fell short of analysts' consensus estimates, which anticipated an EPS of $0.09, representing a miss of $0.27. The company also reported a negative return on equity of 66.19% and a troubling negative net margin of 162.50%. Comparatively, during the same quarter the previous year, Red Cat had posted an EPS of ($0.11). Looking ahead, analysts forecast that Red Cat Holdings, Inc. will record an EPS of -0.39 for the current year.

Insider Trading Activity

Recent insider trading activity has also come to light. Director Nicholas Reyland Liuzza, Jr. sold 328,928 shares of the company on December 18, with the sale occurring at an average price of $8.29, amounting to a total of $2,726,813.12. Following this transaction, Liuzza now holds 681,072 shares, valued at approximately $5,646,086.88, reflecting a 32.57% reduction in ownership.

Additionally, CEO Jeffrey M. Thompson sold 392,551 shares on December 23 at an average price of $11.34, totaling $4,451,528.34. Post-transaction, Thompson directly owns 13,121,898 shares, worth around $148,802,323.32, which is a 2.90% decrease in ownership. Over the last ninety days, insiders have sold 1,915,441 shares valued at $20,886,151, with corporate insiders collectively owning 21.50% of the company's stock.

Institutional Investor Insights

Recent movements among hedge funds reveal adjustments to their holdings in Red Cat. Sanctuary Advisors LLC initiated a new position in the third quarter, valued at about $25,000. Meanwhile, Sheets Smith Wealth Management and United Capital Management of KS Inc. acquired new stakes valued at approximately $51,000 and $108,000, respectively. XTX Topco Ltd increased its stake by an impressive 390.9% during the second quarter, now owning 58,895 shares worth $68,000. Lastly, Pekin Hardy Strauss Inc. purchased a new position during the third quarter valued at approximately $138,000. Notably, institutional investors and hedge funds currently hold 37.97% of Red Cat's stock.

About Red Cat Holdings

Red Cat Holdings, Inc. operates within the drone industry, providing a range of products, services, and solutions. The company organizes its activities into two segments: Enterprise and Consumer. It has developed infrastructure to manage drone fleets, offering remote services and navigation for both industrial environments and military applications.

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