Nukkleus shares are rising sharply along with Majority Star 26’s equity stake

Software company Nukkleus (NUKK) is expanding its operations after acquiring a 51% majority stake in defense firm Star 26 Capital. This is a big deal for NUKK, as Star 26 Capital owns Rimon, the supplier of critical components for Israel’s Iron Dome missile defense system.

Nukkleus paid a mix of cash and shares for its stake in Star 26 Capital. These include a promissory note for NUKK shares and warrants to purchase additional shares. The total value of this purchase was $26 million, with Star 26 Capital including an option for Nukkleus to purchase the remaining equity at a later date.

Nukkleus CEO Manny Shalom notes that this purchase is part of Nukkleus’ plan to transition from a software company to a defense company. She said NUKK would “take advantage of opportunities in the defense sector, which is experiencing rapid growth due to geopolitical changes in the Middle East and the war in Ukraine.”

How this affects NUKK stock today

Nukkleus shares are surging in tandem with today’s takeover news, with shares of NUKK stock up 947.48% as of this writing. However, shares of the company are still down 29.52% year-to-date.

A key factor behind the rise in NUKK stock is increased trading activity. As of this writing, more than 136 million shares of Nukkleus have changed hands. That’s an incredible increase from the three-month average daily trading volume of 586,290 shares.

While NUKK stock trades for around $14.56, the stock closed yesterday at $1.39, putting it in penny stock territory. This means that today’s rally may not last and the stock will decline once the hype surrounding Star 26 Capital’s holding dies down.

Is NUKK stock a buy, sell or hold?

There is not enough analyst coverage to provide a consistent answer to this question. Instead, let’s look at the technical analysis that TipRanks offers. The general consensus is “Sell” with 14 selling indicators, two neutral and six bullish indicators. The technical analysis consensus is “Buy,” while the moving average consensus is “Strong Sell.”

More technical analysis data from NUKK can be found here

Disclosure