Red Cat Holdings Inc (RCAT)

[nickmerck]

If they put $6M into DroneBox, at $50 (>30% premium over competing products) they only have to sell about 600'000 to break even. There are 800'000 drones registered in the USA, with about 80% of them being DJI drones and incompatible. That means each remaining drone needs 6 DroneBoxes or DJI needs to lose all of their market share, just to break even.

Now, assuming they sell them at a higher price, let's say $200. That limits their market to commercial drones - nuch smaller numbers. At that point, each drone would need about 10 DroneBoxes in them for them to break even.

But the market grows at 30% each year, you say? It would still take 3 years for them to break even at 100% market share (yes, that's unrealistic).

Now all that is just for your initial $6M investment to break even. And you think shorting this thing is risky? Do you really believe that institutional investors won't do this math?