Following the announcement that Donald Trump Jr. had joined its advisory board, shares of a little-known drone firm surged on Wednesday.
The hiring was revealed in an early-morning news release by Unusual Machines, an Orlando, Florida-based company that was founded just two years ago after it purchased a drone maker and a different drone selling company.
The CEO of Unusual Machines, Allan Evans, stated in the statement, “Don Jr. joining our board of advisors provides us with unique expertise we need as we bring drone component manufacturing back to America.” “He brings a wealth of experience, and as we continue to grow our business, I look forward to his advice and role within the Company.”
In the statement, Trump Jr. also contextualized the action in relation to his father, President-elect Donald Trump, and his America First economic strategy.
“Drones are clearly needed. Additionally, it’s clear that we need to cease purchasing Chinese drones and drone parts,” Trump Jr. stated. “I’m thrilled to play a larger part in the movement and appreciate what Unusual Machines is doing to bring drone manufacturing jobs back to the USA.”
With significant trading activity following the announcement of Trump Jr.’s relocation, Unusual Machines’ shares almost doubled to almost $10 before partially reversing the gains. On Wednesday afternoon, it closed at $9.89 per share. The shares dropped as low as 98 cents in May.
A share offering disclosed in a securities filing on Wednesday shows that Trump Jr. has 331,580 shares of Unusual Machines. His involvement in a private placement issue of shares at a purchase price of $1.52 per unit resulted in the holding of 131,580 of those shares.
According to the filing, the remaining 200,000 shares are held by Trump Jr. as a consequence of an advisory and restricted stock unit arrangement. When the agreements are approved by the company’s board, half of those shares can be sold right away.
The remaining shares will vest on May 22, 2025. “The Selling Stockholders may sell all, some, or none of the offered Shares in this offering,” according to the document.
When asked what he would be expected to do under Trump Jr.’s advising arrangement, Chief Financial Officer Brian Hoff declined to respond. The spike in stocks on Wednesday shows how much an entity’s fortunes may change, for better or worse, when it is associated with the Trump name.
When Donald Trump mentioned a firm or one of its executives on social media during his first term as president, shares of that company may have dropped or increased, posing meaningful dangers or opportunities for investors.
Earlier this month, Unusual Machines had already gained a lot of traction, registering significant growth following Election Day. However, as of early Wednesday afternoon, its market worth was a very low $69 million, notwithstanding the share gains.
Additionally, Unusual Machines may be targeted if President-elect Trump starts a fresh trade war with China. In the securities filing, the firm mentions how heavily it depends on Chinese imports, which Trump now claims would be subject to harsh penalties once he becomes office. The company warned of possible price hikes in a regulatory filing, stating that “further tariffs could materially and adversely affect our business and results of operations.”
A request for comment was not immediately answered by a representative of Unusual Machines. According to CNBC, Unusual Machines made $3.85 million in net proceeds from the sale of 1.25 million shares of stock at the end of its February IPO.
The firm also purchased the drone brands Rotor Riot and Fat Shark from Red Cat after completing its initial public offering (IPO). The creator, former CEO, and current board member of Unusual Machines is Jeffrey Thompson, who is also the CEO and founder of Red Cat.
Unusual Machines stated in a recent regulatory statement that it “terminated its engagement with their prior auditor” and switched accounting firms in April. Trump Media, the parent business of Truth Social, whose primary owner is the president-elect, was audited by the firm in question, BF Borgers CPA.
In May, BF Borgers was accused of “massive fraud” by the SEC for work that impacted over 1,500 SEC filings. Benjamin Borgers, the owner and auditor, consented to pay $14 million in fines and to be permanently barred from practicing accounting before the SEC. Shortly after, Trump Media hired a new auditor to take BF Borgers’ place.
According to Unusual Machines’ most recent quarterly report, the company’s previous financial statements were re-audited by its own new accounting firm, which discovered that a number of transactions and stock compensation expenditures were missing.
