Archer Aviation Triggers $850 Million in Dilution, Stock Plummets Harder Than My Faith in Air Taxis…

Somebody at Archer Aviation must’ve thought, “You know what would make investors lose their collective minds?” Dumping $850 million worth of shares right after a Trump executive order and calling it bullish.” And just like that, Archer plunged -15% so fast yesterday it gave everyone of its investors a friggin’ nosebleed. 

(Source: Giphy) 

In short, Archer, a company whose entire business objective is turning every city into a glorified Jetson episode, just did an 85 million share offering at $10 a pop. The result: a pro forma liquidity position of $2 billion, which is CEO Adam Goldstein’s way of saying, “big swingin’ cash burn”. What's actually funny is that following the announcement, Goldstein stated, “Archer’s future couldn’t be any brighter”.... And yet shares still proceeded to get shanked in an alleyway. 

So what’s all this cash for, you ask? Apparently, they’re building the infrastructure for their electric vertical takeoff and landing (eVTOL) fever dream, rolling out an AI-powered aviation software platform and prepping to shuttle VIPs at the 2028 LA Olympics. Of course, this does sound sexy as investors were briefly horned up earlier this week when Trump signed an executive order to juice the eVTOL market. In fact, both Archer and their not-so-friendly rival Joby Aviation caught a massive sugar high because of it. 

(Source: CNBC) 

But then Archer remembered it’s still a pre-revenue science project lighting money on fire, so the market did what it always does when founders ask for a billion dollars for “infrastructure and AI”... it panicked and ran for the exits. For instance, this share sale is $850 million in straight cash homie, 85 million new shares, and a stock now orbiting the toilet at just over $10. Meanwhile, Joby Aviation is licking its wounds after a $250 million check from Toyota, and United Airlines is still pretending its NYC airport air taxi partnership with Archer is going to work out. Spoiler: If Elon can’t get a robotaxi to not yeet itself off the highway, don’t hold your breath for this. 

Translation: the eVTOL industry is a toddler just starting to walk. One wrong step (read: regulation) and the whole thing is airborne in the wrong direction. So Archer’s $2 billion liquidity pile is basically a countdown timer of life support until the next capital raise. But, but, but… the United Arab Emirates is on the docket to be their first launch market, which makes sense. Dubai’s the only place on Earth where someone might actually summon a flying Uber to avoid rush hour. However, to me… that seems like too much of a fantasy to be a reality anytime soon. 

(Source: Giphy) 

I could be wrong obviously, but saying it’s going to be adopted on a broad scale within the next year or two is about as delusional as saying Archer’s balance sheet is “stronger than ever”... when you know “strong” actually means “ready to be mugged by dilution”. And naturally, Wall Street is looking between the lines on this too. 

Of course, we’ll see what next week's price action gives us, but for now, investors are hot and bothered (and not in a good way) over Archer’s sale. Meaning, keep your eyes on this story and place your bets accordingly, friends. Until next time… 

At the time of publishing, Stocks.News holds positions in United Airlines and Uber as mentioned in the article.