Al Root

After a wild trading debut last week and a rocky Monday session, shares of drone technology start-up Swarmer rose by double-digits on Tuesday.

Erik Prince, Swarmer's nonexecutive chairman and significant stakeholder in the company via stock options, told Barron's earlier this week that he suspected the stock would be a hit.

Shares traded as high as $65.04 in the days following its March 16 IPO, which were priced at $5 a share. That valued the company at roughly $800 million.

Prince noted that other drone companies have been trading at eye-popping valuations. Drone technology provider Karman, for instance, priced its IPO at $22 a share in February 2025. Shares were north of $100 on Monday, leaving them trading for about 160 times estimated 2026 earnings.

The stock market rose on Monday after President Donald Trump said the U.S. and Iran held talks aimed at ending hostilities in the Middle East. However, Swarmer shares dropped 28% to $26.36; the S&P 500 and Dow Jones Industrial Average rose 1.2% and 1.4%, respectively. Still, that puts Swarmer at about 1,000 times 2025 sales. (Swarmer isn't profitable.)

Winding down the U.S.-Iran war could weigh on shares of a defense-focused start-up. It's more likely that Swarmer stock is caught up in post-IPO trading volatility. (Shares rose 34% to $35.38 on Tuesday.)

Prince, a former Navy SEAL, is a singular figure in the defense industry, founding the private security firm Blackwater in 1997, shortly after leaving the military following the death of his father, who founded and ran auto parts maker Prince Corporation.

Blackwater was founded when military spending was falling, after the Cold War ended. Spending on defense didn't accelerate until 2001, after the attacks on the World Trade Center. That meant there was no early-stage capital money available for defense start-ups. "Because of my Dad's success, there was an unusual opportunity to fund something like Blackwater," Prince says. It "was laid out to recruit, vet, equip, train, deploy, and support people to do a difficult thing."

Blackwater's operations wound down in 2010 after the federal government's decision not to renew its license following controversies in Iraq.

After Blackwater, Prince was freed up to explore other opportunities that eventually led him to Ukraine and Swarmer, which makes drone-autonomy software that enables a limited number of operators to control dozens or hundreds of drones simultaneously.

His confidence in the company comes from success in real-life combat situations. Swarmer says its technology has been used by Ukrainian forces since April 2024, supporting more than 100,000 combat missions.

Watching Ukraine adapt drone technology impressed Prince: "Smart people working from their garages that have kept [Ukraine] in the war."

The Ukrainian conflict and the current fighting in Iran have taught investors so-called missile math. It makes no sense to shoot down a $40,000 drone with a $4 million missile. That is something Prince wants to help remedy. "I'm hellbent on bringing the best proven combat technology to the Western warfighter," he says.

Private-market solutions and competition are the best ways to do that, Prince adds, citing SpaceX and its success in restoring U.S. space launch capacity at a fraction of the cost it would have taken NASA to do the same.

As for drones, the Defense Department's Defense Innovation Unit's competition, designed to rapidly equip warfighters with thousands of low-cost, expendable, one-way attack drones, is a good step in improving weapons development and acquisition, he says.

Beyond Swarmer, Prince is still involved in private security. His company, Vectus Global, was hired in 2025 by the Haitian government to help combat gang violence.

As for oversight, Prince believes a strong governmental "referee" can mitigate many concerns. Effective oversight isn't easy. Human Rights Watch recently released a report detailing how drone strikes had killed dozens of bystanders in the conflict with Haitian gangs. Human Rights Watch has also called the Haitian crime crisis "catastrophic" in an earlier report.

Write to Al Root at allen.root@dowjones.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

March 24, 2026 16:18 ET (20:18 GMT)

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