Unusual Machines Inc (NYSEAMERICAN: UMAC) is up more than 100% on Wednesday after naming the son of President-elect Donald Trump to its board of advisors.
Donald Trump Jr. will provide the “expertise we need as we bring drone component manufacturing back to America,” Allan Evans – the company’s chief executive said in a press release today.
The sharp increase in Unusual Machines stock price this morning is coupled with a heavy increase in volume.
More than 17 million of its shares have exchanged hands so far versus its average daily trading volume of a little over 100,000 only.
Why did Donald Trump Jr. join Unusual Machines?
Trump Jr. is joining Unusual Machines at a time when China-made drones, particularly from companies like DJI, have been flagged as national security threats.
Such products can be used for surveillance – collecting data on critical infrastructure and other sensitive locations that could be exploited for intelligence or other malicious purposes.
“The need for drones is obvious [but] it’s also obvious that we must stop buying Chinese drones and Chinese drone parts,” the son of the President-elect said in a statement on Wednesday.
He particularly touted the company for bringing drone-related jobs back to the United States. Unusual Machines stock is now trading at about 10x its price in May.
How is UMAC doing in terms of financials?
Unusual Machines lost a little under $5.0 million in the first nine months of 2024.
But Trump Jr. brings a “wealth of experience” as a member of its advisory board that may help it expand it business and strengthen its financials in the coming year.
For the latest reported quarter, UMAC recently announced $1.53 million in revenue – up 9.0% on a year-over-year basis. The company’s gross margin stood at 26% in Q3.
Also on Wednesday, the company based out of Orlando, FL filed to sell 3.58 million of its common shares. Unusual Machines stock does not currently pay a dividend.
Unusual Machines stock may have overreacted
All in all, the appointment of Donald Trump Jr. may prove to be invaluable for Unusual Machines in strengthening its position in the drone industry.
The company remains fully committed to increasing its enterprise sales and remains on course to hit its target of $5.0 million in sales this year, as per chief executive Allan Evans.
UMAC plans on introducing new US-built components and expanding its Rotor Riot operations as well.
Unusual Machines stock is not particularly covered by Wall Street analysts. Nonetheless, a 90% increase in share price following the Trump Jr. announcement today should make investors question if the stock has gotten ahead of itself.
The company sure has an exciting ambition – but it does have a lot to prove as well.
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