Despite this, retail investors continue to support the defence technology firm while institutional investors retreat and short sellers raise their bets against it.
The company had surged nearly 200% earlier in the year and joined the S&P/ASX 200 Index in September. By October, about 35,000 small investors held shares in DroneShield, making it popular among retail traders. The surprise sell-off by company leadership, however, shook confidence and led to a rapid share price decline.
According to AUSIEX, retail traders made DroneShield the most purchased stock on the Australian Securities Exchange in November. It attracted more buying activity than major banks and speculative mining shares, showing ongoing retail enthusiasm. Hedge funds moved in the opposite direction, increasing short positions. Short interest in DroneShield rose from 4.2% at the start of November to 8.7% by 1 December, placing it among the most shorted shares on the exchange.
This growing divide between confident retail investors and cautious institutions reflects the challenge of balancing market excitement with underlying business performance. DroneShield now finds itself at the centre of a shift where high-risk trades face deeper analysis. The future remains uncertain, with sentiment continuing to drive short-term share movement.
