T3 Defense Surges 22% Tuesday on Active Trading After Reverse Stock Split

T3 Defense Inc. shares surged nearly 22% on Tuesday as traders piled into the defense technology company's tightly held stock.

The Nasdaq rose 0.65%, and the S&P 500 gained 0.27%. However, T3 Defense's gains far outpaced the broader market.

What Happened?

T3 Defense has remained highly volatile since completing a 1-for-125 reverse stock split.

The company completed the split to meet Nasdaq listing requirements. However, a smaller public float could amplify price swings when speculative trading volume rises.

T3 Defense also announced a business expansion on August 21. Its Rimon Agencies subsidiary entered the drone and counter-drone platform market.

Rimon is developing configurable launch trailers, sensor masts, off-grid power systems, and drone docking platforms. It is also building command-and-control vehicles.

These systems can integrate customer-selected sensors, software, and other equipment without requiring permanent infrastructure. The expansion follows a June delivery to IMI Systems (a part of Elbit Systems Ltd.).

Bearish Report Raises Risks

Earlier this month, short-seller firm Fugazi Research published a bearish report on T3 Defense.

The report questioned the company's financial performance, acquisition strategy, and capital structure. It also highlighted operating losses, potential dilution, and the company's goodwill balance.

T3 Defense Stock Performance

T3 Defense shares rose 21.53% to $16.30 on Tuesday.