--- title: "Red Cat spends two-thirds of its $325.6 million cash on Steyr Motors while burning $47 million a quarter" description: "The Nasdaq-listed defense drone maker has agreed to pay up to about EUR 204.8 million, roughly two-thirds of its USD 325.6 million cash pile, for Steyr Motors' military engine business while burning USD 46.8 million of operating cash a quarter. Steyr shareholders get a cash premium; Red Cat shareholders get the integration and financing risk, with dated gates now set for the deal to clear or die." publisher: "The Inference" section: "Robotics & Defense" published: 2026-10-25T18:10:19.787Z modified: 2026-10-25T18:10:19.787Z canonical: https://theinference.org/article/red-cat-spends-two-thirds-of-its-325-6-million-cash-on-steyr-motors-while-burning-47-million-a-quarter language: en keywords: "Red Cat Holdings, Steyr Motors, Defense Drones, Mergers & Acquisitions, Insider Sales" --- # Red Cat spends two-thirds of its $325.6 million cash on Steyr Motors while burning $47 million a quarter > The Nasdaq-listed defense drone maker has agreed to pay up to about EUR 204.8 million, roughly two-thirds of its USD 325.6 million cash pile, for Steyr Motors' military engine business while burning USD 46.8 million of operating cash a quarter. Steyr shareholders get a cash premium; Red Cat shareholders get the integration and financing risk, with dated gates now set for the deal to clear or die. [Red Cat Holdings](https://theinference.org/markets/companies/red-cat-holdings), the Nasdaq-listed defense drone maker, signed a [binding agreement on October 21](https://markets.ft.com/data/announce/detail?dockey=600-202610210758DGAP____CORPNEWS_corporate_2419468_en-1) to buy Steyr Motors, an Austrian maker of military engines, through a cash tender offer of EUR 39 per share for all 5,251,261 Steyr shares [1][6]. That is up to roughly EUR 204.8 million, about two-thirds of the USD 325.6 million Red Cat held in cash at June 30, 2026 [1][2]. A drone company is buying an engine factory with most of its war chest. ## The buyer is not the picture of health Red Cat's drone business is growing and bleeding at the same time. Q2 revenue of USD 20.19 million rose 30.5 percent from Q1's USD 15.47 million, but the net loss widened to USD 35.26 million from USD 26.55 million, and [operating cash burn hit USD 46.8 million in the quarter](https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000748268) [2]. The quarter also missed Wall Street: revenue fell short of a USD 22.58 million consensus and the USD 0.26 per-share loss was wider than the USD 0.17 expected [7]. *Chart: **Red Cat's revenue is growing, but its cash burn is growing faster** Column chart of Red Cat quarterly revenue and operating cash flow from Q1 2025 to Q2 2026, showing revenue growth alongside deepening cash burn.* *Red Cat's revenue and quarterly operating cash flow, USD millions, by calendar quarter, from SEC filings via company_series. [3][8]* The check plus one quarter: the up-to EUR 204.8 million Steyr offer sits against a USD 325.6 million treasury that lost USD 46.8 million of operating cash in Q2 alone, so a purchase plus one more quarter of that burn consumes nearly the entire pile [2]. If the maritime arm produces no revenue line, Red Cat will have to raise money, dilution or debt, before the drone business pays for itself. *Chart: **The cash pile doubled on financing, and the Steyr offer would take most of it** Line chart of Red Cat's cash balance at the end of each quarter from Q1 2025 to Q2 2026.* *Red Cat's cash at quarter end, USD millions, from SEC filings via company_series. The June 30, 2026 balance is the treasury the Steyr offer draws on. [3][8]* ## Timing on the insider sale The market has already voted: the stock closed at USD 4.43 on October 23, near the floor of a USD 4.14 to USD 18.78 52-week range [2]. The timing of the insider sale is on the record too: CEO Jeffrey Thompson sold 150,000 shares for USD 676,500 on October 15, four days before the tender offer was announced on October 19 and six days before the binding agreement was signed, per [his Form 4](https://finance.yahoo.com/markets/stocks/articles/red-cat-holdings-insider-sold-213648070.html) [4]. The sale predates the public tender; what the window meant is for readers to weigh. ## Bulls say growth outpaces the burn; the Hold rating says it does not yet Needham reiterated Buy with a USD 15.00 target on October 20, arguing revenue compounds fast enough to grow into the spending [2]. Steyr's engines feed Red Cat's Blue Ops push into uncrewed surface vessels, robotic boats for navies, which has reached full-rate production of its Variant 7 boat and a Navy lease for testing under the Office of Naval Research, though no separate revenue line is disclosed [1][7]. [TipRanks' aggregate rating is Hold at USD 6.00](https://www.theglobeandmail.com/investing/markets/stocks/RCAT/pressreleases/8423435/red-cat-advances-steyr-motors-acquisition-to-expand-defense-portfolio/), citing losses, cash burn and a legal overhang [1]. ![Red Cat's Blue Ops Variant 7 uncrewed surface vessel running at speed on open water.](https://storage.googleapis.com/theinference-public/img/020d957bf68f5694.jpg) *Blue Ops' Variant 7 uncrewed surface vessel, the program Steyr Motors' military engines are meant to feed. (Courtesy of Red Cat Holdings) (Courtesy of Red Cat Holdings)* ## What decides it, and when The gates now have dates. [The offer document](https://www.ad-hoc-news.de/boerse/news/unternehmensnachrichten/red-cat-s-steyr-motors-offer-fully-funded-still-conditional/70364066) is due before November 15, 2026; the acceptance period ends December 18, 2026, with a 50 percent plus one share threshold, anchored by B&C Holding's committed 15 percent stake [5][6]. Foreign-investment clearances in Austria, Australia, Italy and the United Kingdom are expected by June 30, 2027 [6]. After closing, Steyr minorities face possible squeeze-out, the Steyr site is protected for three years, and Red Cat shareholders face the financing question [6]. The cash buys engines on day one; whether it buys a moat is decided by deliveries, not by the tender [2][7]. ## Takeaway Red Cat has agreed to pay up to EUR 204.8 million, about two-thirds of its cash, for Steyr Motors' military engine business while burning USD 46.8 million of operating cash a quarter; the tender closes or dies on dated gates through December 18, 2026 and regulatory clearances expected by June 30, 2027. ## Sources 1. [The Globe and Mail (TipRanks), Red Cat Advances Steyr Motors Acquisition to Expand Defense Portfolio, 24 October 2026](https://www.theglobeandmail.com/investing/markets/stocks/RCAT/pressreleases/8423435/red-cat-advances-steyr-motors-acquisition-to-expand-defense-portfolio/) 2. [Ad Hoc News, Needham reiterates Buy rating for Red Cat Holdings stock, 24 October 2026](https://www.ad-hoc-news.de/boerse/news/corporate-news/needham-reiterates-buy-rating-for-red-cat-holdings-stock/70406296) 3. [Red Cat Holdings, quarterly figures from its SEC filings, retrieved 25 October 2026 (via company_series)](https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000748268) 4. [Yahoo Finance (MT Newswires), Red Cat Holdings Insider Sold Shares Worth $676,500, According to a Recent SEC Filing, 19 October 2026](https://finance.yahoo.com/markets/stocks/articles/red-cat-holdings-insider-sold-213648070.html) 5. [Ad Hoc News (boerse-global.de), Red Cat's Steyr Motors Offer: Fully Funded, Still Conditional, 19 October 2026](https://www.ad-hoc-news.de/boerse/news/unternehmensnachrichten/red-cat-s-steyr-motors-offer-fully-funded-still-conditional/70364066) 6. [FT Markets (EQS Group), Steyr Motors AG: Business Combination Agreement signed with Red Cat Holdings and SMOT Acquisition GmbH, 21 October 2026](https://markets.ft.com/data/announce/detail?dockey=600-202610210758DGAP____CORPNEWS_corporate_2419468_en-1) 7. [24/7 Wall St., Red Cat Jumps 8% on Cash Offer for Steyr Motors, 19 October 2026](https://247wallst.com/investing/2026/10/19/red-cat-jumps-8-on-cash-offer-for-steyr-motors-aerovironment-and-kratos-edge-higher/) 8. [Red Cat Holdings, quarterly figures from its SEC filings, retrieved 25 October 2026](https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000748268) --- Red Cat spends two-thirds of its $325.6 million cash on Steyr Motors while burning $47 million a quarter — The Inference. Canonical: https://theinference.org/article/red-cat-spends-two-thirds-of-its-325-6-million-cash-on-steyr-motors-while-burning-47-million-a-quarter