Shares of DroneShield Ltd (DRO.AU) plummeted 5.19% in Tuesday's trading session, as investors reacted to growing concerns about the company's governance and recent insider selling activity. The sharp decline comes amid speculation of potential investigations that could further impact the counter-drone technology firm's stock price.

Jun Bei Liu, a renowned stock picker and founder of TenCap, has placed DroneShield on her "Avoid" list, citing several red flags. Liu, who had previously invested in the company, expressed unease about recent events, including a withdrawn contract announcement and subsequent selling of shares by company directors and the CEO. "It just feels, there's something there that might lead to a lot of investigation, which is normally not great for share price, especially for the speculative ones," Liu commented.

The market's reaction appears to reflect growing skepticism about DroneShield's transparency and the potential for regulatory scrutiny. With questions lingering about the company's recent actions and the possibility of investigations, investors seem to be reassessing their positions, leading to the significant sell-off observed in the pre-market session. As the situation unfolds, market participants will likely be closely monitoring any further developments or statements from the company to gauge the potential long-term implications for DroneShield's stock performance.