Shares of Archer Aviation fell sharply on Friday — down as much as 15%. This plunge came on the heels of the company’s announcement that it would be selling $850 million in new shares. When they went public, the company sold 85 million shares and the initial share price was $10. This sudden flow of widespread capital raised eyebrows and concerns among investors.
In fact, Archer Aviation just closed a pro forma recent funding round, providing them with a liquidity of approximately $2 billion pro forma. They’re utilizing this capital to create additional alternatively-powered infrastructure and to finally release their artificial intelligence-based aviation software platform. Through this strategic pivot, urban air mobility operators are seeking new ways to improve operational efficiency while preparing and positioning themselves for the scalable use case of tomorrow.
CEO Adam Goldstein expressed optimism about the company’s future, emphasizing that the funding will solidify Archer Aviation’s position in the market. “We now have the strongest balance sheet in the sector and the resources we need to execute both here in the U.S. and abroad,” Goldstein stated.
This stock offering comes on the heels of President Donald Trump’s recent executive order. The order sets up a pilot program specifically to encourage the development and deployment of electric Vertical Take-Off and Landing (eVTOL) vehicles in the United States. Recently, Archer Aviation partnered with United Airlines to deploy an air taxi service from airports. They aim to launch their Midnight eVTOL aircraft in the United Arab Emirates as their first market.
Archer Aviation is prepared to debut its first Midnight eVTOL aircraft at this year’s Paris Air Show. This event celebrates their deep commitment to furthering the cause of urban air mobility. The company has further showcased its Midnight launch edition commercialization program, and with Abu Dhabi Aviation as its first customer.
As demand for eVTOL companies continues its incredible growth, Archer Aviation will have some stiff competition from other private firms like Joby Aviation. Recently, Joby secured a $250 million installment from a $500 million contract with Toyota aimed at certifying and producing eVTOL vehicles. This intensifying competition highlights the growing interest in sustainable air transit solutions that promise to reduce emissions and alleviate traffic congestion.
Goldstein is optimistic that with the continued leadership from the Trump administration, U.S. dominance in aviation innovation will continue. He stated that “Trump 2.0 will help the U.S. maintain its position as an aviation leader,” suggesting that policies supporting technological advancement will benefit companies like Archer Aviation.