Unusual Machines surges 8% as Pentagon to boost production of low-cost U.S. drones

Unusual Machines surges 8% as Pentagon to boost production of low-cost U.S. drones

The Pentagon has announced significant changes to its military drone procurement and deployment practices, aiming to gain a strategic edge over adversaries like Russia, Iran, and China. Defense Secretary Pete Hegseth's memo, obtained by Fox News, instructs Pentagon officials to ramp up orders of low-cost unmanned aerial vehicles (UAVs). For the first time, officers with the rank of colonel or captain can independently procure and test drones, including 3D-printed vehicles and commercial off-the-shelf models, without seeking approval from higher-ups [1].

The memo reclassifies small "Group 1" and "Group 2" drones as consumables, not military assets, making them easier to order and use. This change is designed to treat drones more like munitions than traditional aircraft, allowing for rapid replacement and reducing logistical burdens [3].

Hegseth's directive comes in response to the escalating use of drones in conflicts around the world. In the Russia-Ukraine war, both sides have deployed thousands of kamikaze drones, highlighting the importance of these unmanned systems in modern combat [1]. The U.S. aims to close this gap by boosting domestic production and loosening regulatory barriers.

Stocks of U.S. drone manufacturers, such as Unusual Machines (UMAC), surged in response to the memo. UMAC's stock rose 8% in extended trading on Thursday, following Hegseth's directive [2]. This increase reflects investor confidence in the potential growth of the U.S. drone market and the Pentagon's commitment to modernizing its drone program.

The Pentagon's new strategy includes three key initiatives: bolstering the U.S. drone manufacturing base, removing regulatory barriers, and establishing a searchable database of U.S. drone vendors and parts suppliers [3]. These changes aim to ensure the U.S. military is well-equipped to deploy drones in the same manner as its adversaries, with a focus on lethality and rapid deployment.

References:

[1] https://www.flyingmag.com/hegseth-orders-pentagon-drone-surge/
[2] https://newsable.asianetnews.com/markets/red-cat-unusual-machines-aerovironment-jump-after-hours-as-hegseth-urges-pentagon-to-boost-drone-deployment-lethality-will-not-be-hindered-articleshow-3ckwzgr
[3] https://www.turkiyetoday.com/world/pentagon-chief-pete-hegseth-vows-to-boost-us-drone-production-3204148