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Archer Aviation: Set To Take Flight After Deal Cut

Aug. 03, 2021 8:45 PM ETArcher Aviation Inc. (ACHR)JOBY, UAL30 Comments


  • Archer Aviation is a far better deal after the valuation was cut and the stock price has fallen 50%.
  • The company still appears on a path to releasing an eVTOL in 2024.
  • The stock faces too much SPAC closing risk with the stock below $10 to buy here.
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Only about 6 months ago, Atlas Crest Investment Corp. (ACIC) announced an exciting business development deal with Archer Aviation. The urban air mobility space was so exciting that the SPAC soared

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Stone Fox Capital Advisors, LLC is a registered investment advisor founded in 2010. 
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Comments (30)

Any idea what eVTOL firms might go public in 2022....?
Stone Fox Capital profile picture
Remember, insiders thought the stock was worth $10 over a year ago. Glad to see them back up the truck here.

-Archer Aviation (NYSE:ACHR) reported 746,183 shares purchased by director Lore Marc E. Owner in multiple transactions for price ranging between $2.83-$3.28 worth ~$2.3M.
-Post the transactions, the director now owns ~28M shares; company's ownership structure indicates individuals/insiders ownership at 43.5%.
OMG, by 'flight' do you really mean burrow to the center of the earth?
@Wellington999 I was thinking the same. There's no floor to this stock, really. They don't have a plane that's close to completion, then you need to be certified for urban flight and THEN you have to trust their numbers..
Stone Fox Capital profile picture
Nobody is forcing you to invest in what amounts a startup investment. A lot of big investment firms did invest though b/c this is how one turns a $5 investment into a $100 stock.
@Stone Fox Capital Yes, I'm just giving my point of view and I know no one is forcing me. I always appreciate your articles, this one is no exception.
Stone Fox Capital profile picture
Interesting for $ARKQ to pick Archer

-ARK Invest continues to snap up shares of Archer Aviation Inc. (ACHR) for its ARK Autonomous Tech. & Robotics ETF (BATS:ARKQ). The company's stated mission is to advance the benefits of sustainable air mobility
-ARK added another 295K shares on Friday to follow on buys of 125K shares on October 7, 58K shares on October 6 and 80K shares on October 5.
-There are now more than 5.49M shares of Archer Aviation (NYSE:ACHR) in ARKQ to place the urban air mobility stock in the list of 25 holdings with a 1.76% weighting. ARK Invest holds a total position of about 2.1% of all of Archer Aviation's outstanding shares.
Stone Fox Capital profile picture
Why not just buy Archer?

-Honda Motor Co. (HMC -2.7%) is expanding its business beyond cars, motorcycles, and lawn mowers. The auto maker hopes to use its expertise in electrification, artificial intelligence, and robotics to launch projects involving e-taxis, avatar robots, and space rockets.
-A future Honda eVTOL (electric vertical take-off and landing) aircraft will be the core of Honda's new "mobility ecosystem" and could compete with Blade Air Mobility (BLDE -0.6%) and Joby Aviation (JOBY +3.5%). Honda says its eVTOL will feature both a lithium ion battery and gas-turbine generator. Flight tests are on track to begin in 2023 and Honda aspires to have the craft certified by 2030.
@Stone Fox Capital then maybe ACHR could be a company interesting to be bought by a larger company? Maybe I’ll wait a few months to see if they start raising capital.
Stone Fox Capital profile picture
$ACHR just raised capital via the SPAC. They shouldn't raise any capital unless something changes and not for a couple of years at that.
@Stone Fox Capital Hello. What would be the current market cap? Is the 400 million shown in SA the right one or is it still showing the SPAC?
Stone Fox Capital profile picture
Looks like the valuation was updated to $2.2B now which appears mostly accurate.
Stone Fox Capital profile picture
Deal approved, but with nearly 50% of shares redeemed greatly reducing cash balances. These SPACs are gonna have to start raising funds.

-Approximately 96% of votes cast at the Special Meeting voted to approve the Business Combination.

-In connection with the vote on the Business Combination, approximately 48.5% of eligible shareholders exercised redemption rights. The Business Combination will generate approximately $857.6 million of gross proceeds, including $600 million of proceeds from the PIPE.

-The closing of the Business Combination is anticipated to occur on or about September 16, 2021. Following the closing, the combined company will be known as “Archer Aviation Inc.” and its common stock and warrants are expected to trade on the New York Stock Exchange under the new ticker symbols “ACHR” and “ACHR WS,” respectively, on September 17, 2021.
Josh Klein profile picture
Could see a short squeeze here as a number of shares are likely to be redeemed with an already existing 20% short interest. I am long some calls and shares.
Stone Fox Capital profile picture
@Josh Klein
Very possible, the stock has already bounced from an initial selloff in the sector. $QELL got approval on Friday for the Lilium deal.

- Qell Acquisition Corp. (QELL) (NASDAQ: QELL.U, QELL and QELL.WS), a special purpose acquisition company focused on next generation mobility, announced today that its shareholders voted to approve the proposed business combination with Lilium GmbH ("Lilium"), positioned to be a global leader in regional electric air transportation with the development of its 7-Seater electric vertical take-off and landing jet.
Josh Klein profile picture
@Stone Fox Capital Yup. Shorting these SPACs prior to redemption disclosure is a recipe for disaster. QELL, PACE, and ACIC could all very much squeeze 20%+. I like ACIC the best given the amount of deep OTM calls that are available. If the market gets wind of the high short interest (which could be 50 or 60% of float depending on the redemptions), retail might start buying options forcing market makers to delta hedge by buying the underlying stock. Could see an IRNT squeeze.
Stone Fox Capital profile picture
Big vote on next week. Interesting to see the bullish calls on $BLDE going with the asset light model.

-The Special Meeting is scheduled to take place on September 14, 2021 at 10:00 a.m., Eastern Time (unless postponed or adjourned to a later date or time), and will be held exclusively in a virtual format.
Stone Fox Capital profile picture
Blown away by the rally in $JOBY... any thoughts?

-Joby Aviation (NYSE:JOBY) popped more than 40% intraday Wednesday in its first trading session following a SPAC merger that took the budding air-taxi service public at about a $6.6B valuation.
-JOBY rose to as high as $14.33, up 42.9% from the $10.03 final close Tuesday for Reinvent Technology Partners, the special purpose acquisition company that merged with the firm.
-Joby’s shares later pulled back some, but nonetheless ended the session at $13.40, up 33.6% for the day.
Zorgo profile picture
@Stone Fox Capital and immediately declined to it's base level. Classic P&D. (and I took an advantage of it)
Stone Fox Capital profile picture
$JOBY is below $9 today. Are you buying more?
Zorgo profile picture
@Stone Fox Capital bought a little more. Obviously nobody knows where it is going to go, with such companies, but it might find a floor here. At least I sold the first time at 13+
Stone Fox Capital profile picture
As expected $RTP had a ton of shares redeemed and this knowledge likely led to the sell off today. Guessing the stock goes even lower.

-42,841,230 of RTP’s Class A ordinary shares were presented for redemption in connection with the Business Combination.
The lawsuit seems like a "where there's smoke, there's fire" type of thing, and it's not like Wisk is too small to fight this fight with both Boeing and Larry Page in their corner.

Even if Archer is in the right here, that means the Archer founders admitted to giving away trade secrets to Wisk, which just shows really poor decision making.

I'm in on EVOTL everywhere I can be, but this feels like a dog to me.
Stone Fox Capital profile picture
Tech lawsuits usually end up taking so long that the company has a vastly different technology in place before the lawsuit is settled. Maybe not the case with an aircraft, but we'll see.
@Faintcommand I tend to agree. I feel like archer has done a really good job of building their audience, and getting the market hype up, but i'm worried that that might be all it amounts to... hype. all of their video content on social lacks substance, and it just feels disingenuous to me. lots of buzz words and team members from different divisions with foreign accents just seems like the most basic credibility pandering, but without having anything too groundbreaking to say. the fact that they've never had their aircraft in flight as far as i can tell is also troubling, and has me scratching my head as to how they were granted access to FAA compliance at this point. and on top of that, they were able to design their first prototype in 7 weeks (or some absurdly short amount of time), where as other companies are flight testing their 3rd or 4th gen prototype models that they spent many months and years developing. Makes me feel like Wisk is probably in the right on this one with their IP lawsuit. I dunno, it just feels sketchy to me. what i'm really curious to know is how they'll be handling their manufacturing, especially if they're intending to operate their own fleet as an on-demand rideshare service AND sell them to others who plan to do the say. other eVTOL companies with pretty massive manufacturing budgets aren't trying to compartmentalize like that, and i have to believe it's because they wouldn't be able to get a big enough foothold in either direction if they tried. so that being said, i won't be surprised if this stock goes bonkers for a little while because of all the hype; but i won't be surprised if they ultimately never get off the ground either.
Stone Fox Capital profile picture
The SPAC market continues to not make much sense with $RTP closing up 10% to top $10 again.
Stone Fox Capital profile picture
$MYPS is another SPAC that broke $10 prior to the vote and share redemptions appeared to have irrationally crushed the stock. Lots to watch on $RTP tomorrow.
Great content….I believe in these companies (Joby and Archer) but the stocks are uninvestable
Stone Fox Capital profile picture
Due to the SPAC closing or just the valuations?
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