The below is from Motley Fool Australia. It gives a fairly...

The below is from Motley Fool Australia. It gives a fairly objective commentary about yesterday's debacle. The best that I can determine is that a short seller published an article attacking DRO because it was "overvalued".Rodney Forrest, director of Sublime Funds Management opined in Capital Brief:

"Its valuation is wild, its equity is more valuable, on paper, than prominent names such as Graincorp, Air New Zealand and Magellan Financial."

In America an innovative company that attains a $1Billion market cap is called a Unicorn and is given accolades. Apparently in Australia that is apparently not the case.

Would anyone here trade their position in DRO for a position in a grain trader, a Kiwi airline or a trouubled fiancial firm? If not then what is Rodney's point? He also states that insiders sold shares at AUS.70. So much for the claim that it was a pump and dump.

I'm sure the usual suspects will trot out their tired tropes about management, stock options and most recently unstoppable autonomous drones. The truth is we live in a world at war that is alive with nefarious villains who wish us harm. DRO offers a defense against their use of FPV drones to accomplish their ends.

I know not what you say but I say this is a buying opportunity.

It's been a fairly ho-hum day on the ASX so far this Tuesday. Fresh from cracking a new all-time record of 8,281.4 points yesterday, the All Ordinaries (ASX: XAO) Index is currently down 0.07%. But let's talk about what's happening with the DroneShield Ltd (ASX: DRO) share price. As one might expect, most ASX All Ords shares are having a pretty average day, apart from some new highs from the ASX banks. But the Droneshield share price's day has been anything but ordinary. Unfortunately, it's not good news for the true believers in this ASX defence stock.

But that's when the selling started. After less than 30 minutes of trading, the Droneshield share price was back in the red. Things didn't look too dire by midday, which had the company drop down to $2.53 a share. However, investors seemed to have gotten a bad case of the afternoon blues soon after. Selling quickly accelerated. The Droneshield share price dropped below $2.40, then $2.20 and finally $2.

At the time of writing, the company has gone into a trading halt, but not before losing an astonishing 28.5% of its value and coming to a stop at $1.86 a share. That's after getting as low as $1.79 in earlier trading, a drop worth more than 31%.

So what on earth is going on with the Droneshield share price that has caused investors to wipe off more than a quarter of this company's value in just a few short trading hours?

Why have DroneShield shares tanked by 31%?

Unfortunately for lovers of certainty and logic, it's a gosh darn mystery. Prior to the request for the trading halt, Droneshield had not made any fresh news or announcements today. In fact, we haven't had any major news from the company for almost a month.

There doesn't appear to be any other news out regarding Droneshield either.

So all we can do at this point is speculate and wait for further updates.

It is possible that some investors have finally decided to take some gains off the table, sparking a rush to get out of the stock today.

Today's drop does look dire. But investors have been raking in the profits (at least on paper) from Droneshield for months now.

Remember, this is a company that has risen from 38 cents a share at the start of 2020 to the record high of $2.72 that we saw this morning. That's a gain worth over 615%. Even after today's drop, the Droneshield share price remains up by around 400% year to date.

As of yesterday's close, the Droneshield share price was also up close to 80% over the past month alone and had risen 20% just last week. Check all of that out for yourself below:

Zoom1M3M6MYTD1Y5Y10YALL

DroneShield PriceZoom1M3M6MYTD1Y5Y10YALL1 Jan 2024→16 Jul 20241 Jul15 Jan29 Jan12 Feb26 Feb11 Mar25 Mar22 Apr6 May20 May3 Jun17 Jun15 Jul1 JanJan '24Jan '24Mar '24Mar '24May '24May '24Jul '24Jul '24Feb '24Feb '24Apr '24Apr '24Jun '24Jun '24012www.********.au

Too hot to handle?

Deep down, most investors know that gains like these are rare on the ASX and don't typically last too long without a pullback. So it was arguably only a matter of time before some investors started to blink and pull money off the table. This could have caused a cascade effect, sparking a rush for the exits.