Datavault AI Inc. (DVLT) shares took a beating on Friday, giving back gains from Thursday's rally. Turns out, when a major shareholder dumps nearly 15 million shares in three days, investors tend to notice.

The Big Sell-Off

According to a Form 4 filing, Scilex Holding Co. unloaded 14,713,490 shares of DVLT between January 6 and January 8 at prices hovering between $1.07 and $1.37. After the selling spree, Scilex still holds approximately 229.7 million shares, but the message was clear: they were reducing their economic stake in a meaningful way.

These weren't internal transfers or restructuring moves—they were straight-up open-market sales. When a major investor starts heading for the exit in such a visible manner, it tends to spook the crowd. Other shareholders start asking uncomfortable questions, and selling pressure builds. That's exactly what appears to be happening with DVLT on Friday, as traders interpret the move as a bearish signal.

The Good News (That Couldn't Save It)

The timing is particularly interesting because Datavault AI actually had some positive developments this week. The company announced plans to deploy its SanQtum AI platform in New York and Philadelphia, partnering with International Business Machines Corporation (IBM) and leveraging IBM's watsonx AI products to beef up data processing capabilities. The goal is to provide cybersecure data storage and real-time scoring, essentially helping clients transform raw data into tradable digital assets on the fly.

There's more: Datavault AI is also rolling out its DVHOLO holographic displays and ADIO spatial audio technology in a collaboration with Riflessi, a luxury retail destination in New York City. That deployment is scheduled to kick off in February 2026 and promises to create immersive advertising experiences while opening up new revenue streams through customized content.

Those are genuinely interesting business developments. But when a major shareholder is actively selling millions of shares, even good news has trouble gaining traction.

What The Charts Are Saying

The technical picture doesn't exactly inspire confidence either. DVLT is trading 11.1% below its 20-day simple moving average and a more concerning 29.2% below its 100-day SMA. That's textbook bearish trend territory. Over the past year, shares have dropped 21.98% and are sitting much closer to their 52-week lows than highs.

The momentum indicators tell a somewhat mixed story. The RSI sits at 44.54, which is neutral ground—the stock isn't screaming oversold or overbought. Meanwhile, the MACD is sitting above its signal line, typically a bullish sign. So you've got neutral RSI paired with potentially bullish MACD, which translates to: nobody's quite sure what happens next.

Key resistance stands at $1.00, while there's no clearly defined support level at the moment, which isn't exactly comforting for investors looking for a floor.

What Analysts Are Thinking

The next earnings report drops on March 30, and expectations are set for a loss of 9 cents per share—though that's actually an improvement from the $2.00 loss the same period last year. Revenue estimates are sitting at $24.70 million, which would represent explosive growth from just $0.90 million year-over-year.

Analysts aren't throwing in the towel. The consensus rating is a Buy with an average price target of $4.00—suggesting substantial upside from current levels. Maxim Group has been active on the name, recently raising its target to $4.00 and maintaining a Buy rating. Previously, they upgraded the stock to Buy with a $3.00 target.

That $4.00 price target looks awfully optimistic when you consider where the stock is trading and what the fundamentals look like.

The Fundamental Picture

Speaking of fundamentals, the data reveals some serious red flags. Looking at momentum, quality, and value scores, Datavault AI is struggling across the board. The momentum score comes in at a weak 20 out of 100, indicating significant underperformance relative to the broader market. The quality score isn't much better at 25 out of 100, pointing to signs of financial instability. But the real concern is the value score: a dismal 4 out of 100, suggesting the stock is trading at a steep premium relative to its peers.

Put it all together, and you've got weak momentum, questionable quality, and valuation concerns—not exactly the recipe for a strong buy case. Investors eyeing this name should proceed with extreme caution, particularly given the combination of insider selling and challenging fundamentals.

Friday's Action

At the time of publication, DVLT shares were down 6.53% to $0.94. That's below the $1.00 resistance level and continues the pattern of weakness despite the company's expansion announcements. Whether the stock can find its footing or continues sliding depends largely on whether investors see value at these levels—or whether they follow Scilex's lead and head for the exits.