Velo3D Inc ( VELO ) shares are gaining momentum Thursday. The rally follows a significant reduction in corporate debt and shifting short-seller dynamics.

CEO Arun Jeldi recently executed a strategic move to strengthen the balance sheet. Jeldi acquired a $5 million promissory note. He then converted that debt into equity at $16.38 per share.

Massive Debt Reduction

Director Ken Thieneman also converted a $10 million note at $10.50 per share. These moves reduced Velo3D's ( VELO ) outstanding debt by 60%. Total debt now sits at approximately $10 million.

"We have substantially deleveraged our balance sheet," Jeldi noted. He added the company is focused on scaling for fiscal 2026.

Short Interest Declines

Benzinga reports show short interest in VELO decreased during the last period. Short positions fell from 2.55 million to 2.31 million shares.

Currently, 18.86% of the float remains short. Traders estimate it would take 1.08 days for shorts to cover their positions.

Defense Contract Momentum

The surge follows a February $11.5 million production contract with a major U.S. defense contractor. Velo3D ( VELO ) is the first 3D-printing vendor qualified by the U.S. Army Ground Vehicle Systems Center.

Technical Analysis

VELO is trading 39.2% above its 20-day simple moving average (SMA) and 46.5% above its 100-day SMA, keeping the intermediate trend pointed up even though the 20-day SMA remains below the 50-day SMA (a bearish crossover backdrop).

Shares are up 362.83% over the past 12 months and are currently positioned closer to their 52-week highs than lows within the $2.81 to $23.84 range.

Key Resistance: $15.50

Key Support: $12.50

VELO Stock Price Activity: Velo3D ( VELO ) shares were up 7.40% at $13.80 at the time of publication on Thursday, according to Benzinga Pro data.