Archer drops as much as 15% on $850 million share sale following Trump air taxi pilot program

Archer Aviation experienced a significant drop in its stock price, falling as much as 15% on Friday following the announcement of an $850 million share sale. This move is part of the company's strategy to enhance its infrastructure and launch an artificial intelligence-driven aviation software platform. The electric vertical takeoff and landing vehicle (eVTOL) maker revealed its intentions to utilize the funds to support its Launch Edition program, which includes a partnership aimed at providing air taxi services during the 2028 Olympics in Los Angeles. The funding round involved the sale of 85 million shares at a price of $10 each, positioning Archer with a pro forma liquidity of approximately $2 billion. CEO Adam Goldstein expressed optimism about the company’s financial health, stating, "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. Archer's future couldn't be any brighter." This stock offering follows an executive order signed by former President Donald Trump, which initiated a pilot program to foster the development and deployment of more eVTOL vehicles across the United States. The news has also positively impacted the stock prices of Archer’s competitor, Joby Aviation, which saw a boost this week. The demand for eVTOL technology has surged in recent years, with proponents highlighting its potential to mitigate emissions and alleviate traffic congestion. However, the technology still faces various regulatory and safety challenges before widespread adoption can occur. In addition to its ambitious projects, Archer has already established a partnership with United Airlines to launch an airport air taxi service. Meanwhile, Joby Aviation recently announced that it secured the first $250 million of a $500 million contract with Toyota to support the certification and production of eVTOLs. Archer is also set to showcase its Midnight eVTOL aircraft at the upcoming Paris Air Show, with plans to debut in the United Arab Emirates as its initial market.