Shares of Red Cat Holdings, Inc. were down over 8% on January 16, 2025, following the release of a report by Kerrisdale Capital. Kerrisdale Capital claims that Red Cat Holdings has overstated the revenue potential of its U.S. Army Short Range Reconnaissance (SRR) drone contract and lacks the production capacity to deliver on its promises. Their report also raises concerns over the timing of executives leaving Red Cat Holdings and insider transactions that took place shortly after the announcement of the SRR contract.
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