TLDR
- Archer Aviation sold $850 million worth of shares at $10 each, causing stock to drop 15% on Friday
- Cathie Wood’s ARK Invest bought $40.28 million worth of ACHR shares during the dip through three funds
- Company plans to use funding for AI-based aviation software platform and 2028 Olympics partnership
- Trump’s executive order created eVTOL pilot program, initially boosting both Archer and Joby stocks
- Archer now has roughly $2 billion in liquidity and claims strongest balance sheet in the sector
Archer Aviation stock took a beating Friday after the electric air taxi company announced it sold 85 million shares for $850 million. The stock dropped about 15% as investors reacted to the dilution from the large share offering.
The company priced the shares at exactly $10 each. This gave Archer a pro forma liquidity position of roughly $2 billion.
CEO Adam Goldstein tried to put a positive spin on the raise. He said the company now has “the strongest balance sheet in the sector.”
The timing of the share sale came after a week of gains for eVTOL stocks. President Trump signed an executive order creating a pilot program for electric vertical takeoff and landing vehicles.
Both Archer and competitor Joby Aviation had rallied earlier in the week on that news. The Trump administration’s support for the technology gave the sector a boost.
Cathie Wood Sees Opportunity
While regular investors sold off, Cathie Wood saw a buying opportunity. Her ARK Invest funds purchased $40.28 million worth of Archer shares during Friday’s decline.
The purchases came through three different ARK funds. The main Ark Innovation ETF bought 2.83 million shares.
The Ark Autonomous Technology & Robotics ETF added another 463,149 shares. The Ark Space Exploration & Innovation ETF picked up 140,636 shares.
Wood’s total purchase of 3.43 million shares shows confidence in the company’s future. Her funds often focus on disruptive technologies like eVTOLs.
Archer plans to use the new funding for several key initiatives. The company wants to roll out an AI-based aviation software platform.
The money will also support infrastructure development. Archer has big plans for its Launch Edition program.
Olympic Partnership and Global Expansion
The 2028 Olympics in Los Angeles represents a major opportunity for Archer. The company has an official partnership to provide air taxi services during the games.
This partnership could serve as a high-profile demonstration of the technology. The Olympics will bring global attention to eVTOL capabilities.
Archer already has other partnerships in place. The company works with United Airlines on airport air taxi services.
The United Arab Emirates will serve as Archer’s first launch market. This international expansion shows the global potential for the technology.
Archer plans to display its Midnight eVTOL aircraft at the Paris Air Show this month. The aviation industry event will showcase the company’s latest technology.
Competitor Joby Aviation recently received $250 million from Toyota. This was part of a larger $500 million contract to support eVTOL certification and production.
The eVTOL sector has attracted increased interest in recent years. Companies promote the technology’s ability to reduce emissions and traffic congestion.
However, the industry still faces regulatory and safety hurdles. Getting approval for commercial operations remains a challenge.
Analysts have mixed views on Archer’s prospects. The stock has a Moderate Buy rating based on four Buy and two Hold recommendations.
The average price target of $11.75 suggests 17.6% upside from current levels. ACHR stock has gained more than 215% over the past year.
Wood’s purchase during the selloff suggests some investors see the current price as attractive. Her track record of investing in innovative companies adds weight to this move.
The $850 million raise gives Archer significant financial resources for expansion. The company claims this funding provides what it needs to execute both domestic and international plans.
