Drone CEO Unfazed After Missing Out on Meme Stock’s 500% Rally

Oleg Vornik Photographer: Brendon Thorne/Bloomberg Photo by Brendon Thorne /Bloomberg

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(Bloomberg) — When DroneShield Ltd. Chief Executive Officer Oleg Vornik sold his entire holding in the company he spent nearly a decade building, he had no idea that the Australian defense firm was about to be swept up in meme stock mania.

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It was early 2024 when Vornik offloaded his more than 10 million-share stake just as DroneShield’s stock hit a record high amid the escalating war in Ukraine. Since then, the company’s valuation has swelled and its shares this year surged more than 500%, making it the best performer in a gauge of defense shares thanks to increased popularity from day traders. 

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“I said last year when we became a meme stock that the share price level didn’t bother me. What bothered me is how quickly we got there, and that most of that had been driven by retail,” said Vornik. He still holds 15.7 million shares in stock options provided the company hits certain revenue targets that are payable starting in 2028.

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Now, Vornik is working to justify the price retail investors have placed on DroneShield by proving the company is a serious player in defense innovation. Central to that effort is DroneShield’s development of counter-drone technology, a specialized but increasingly critical segment of the industry that governments around the world are vying for. These systems detect and neutralize unmanned aerial vehicles, or drones, which have the ability to threaten military and civilian targets.

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Though not a household name and valued at just $2.7 billion — far less than global peers —  DroneShield has already landed major industry deals. Last month, it announced two new contracts worth $7.9 million with the US Department of Defense, a repeat customer. In June, it secured a $40 million delivery to a European military customer. In 2023, it delivered $10.4 million worth of equipment to Ukraine through the Australian government’s aid package. 

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Around the world, governments have raced to pour billions into new investments to meet the growing needs of modern warfare. Germany this month announced nearly $12 billion in military drone investments to protect European and NATO airspace. The European Union is pitching joint drone and air defense projects in coming months as part of a five-year plan. These sweeping commitments are fueling investor enthusiasm for drone technology.

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“If you’re the military, your ideal scenario is you have all the weapons you need to stop the enemy from having a go at you,” Vornik said. 

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Some of those deals are paying off. The company reported quarterly revenue jumped 1,091% in the third-quarter thanks to a string of new contracts, and reported year-to-date committed revenues of nearly fourfold from 2024. 

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Vornik’s path to the top of a defense company traces back to his childhood. His grandfather joined Russia’s military to escape poverty after being forced out of his home during the Nazi invasion. Decades later, Vornik’s family fled an increasingly authoritarian Russia for New Zealand, where he pursued investment banking to secure a better future.