3653% in Two Days! This Crypto Nobody Took Down GME to Become the New Meme King - What Happened?

Nukkleus, the little crypto company, has now taken the crown from GME and AMC as the latest meme king. The shares skyrocketed 3653% in two days due to their bold move into the defense sector, potentially the craziest event in the stock market this year.

Before Tuesday, Nukkleus was traditionally a fintech pioneer focused on cryptocurrency. Then, the company announced later that day the successful acquisition of a 51% controlling stake in Star 26 Capital Inc., a defense acquisition company holding a 95% stake in RIMON, sending the market into a frenzy.

RIMON, a leading Israeli supplier of components for the Iron Dome missile defense system and other defense solutions, has seen heavy use amid missile attacks by Hamas and Iran in the past year.

The transaction, completed on December 15, 2024, involved cash, a promissory note, Nukkleus's common stock, and warrants to purchase additional shares. This deal includes an option for Nukkleus to acquire the remaining equity in Star 26 at a later date.

By acquiring RIMON, Nukkleus gains control over two key business lines:

1. Distribution of Generators, Masts, and Lighting Solutions: RIMON operates through exclusive distributorship agreements with leading suppliers.

2. Development of Tactical Vehicles: RIMON designs and integrates tactical vehicles, including reconnaissance vehicles, mobile command units, and satellite broadcast platforms, serving special defense forces, intelligence agencies, and the Israeli Defense Forces (IDF).

Manny Shalom, the new CEO of Nukkleus, stated, This merger positions Nukkleus at the forefront of the booming defense industry. Our acquisition aligns with our strategic pivot to capitalize on opportunities in the defense sector, driven by geopolitical shifts and the war in Ukraine. This has led to a surge in investments in Israeli defense firms and a significant increase in defense indices in Israel and the US.

Before the deal, Nukkleus had generated $0 in revenue in the trailing twelve months and had a market valuation of about $3 million. As of Wednesday afternoon, the company had a market valuation of about $125 million.

The stock volume was over 1.8 billion on Wednesday, meaning the company just traded 11 times its current market valuation. To compare, the S&P 500 index constituent stocks have an average trading volume of $818 million, which accounts for 0.89% of their market value. This reflects the extreme enthusiasm of retail investors towards NUKK.