Archer Aviation: Set To Take Flight After Deal Cut
- 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 to a high of $18.60 back in February. After the stock has been cut in half and the deal value was slashed, my investment thesis is far more bullish on the eVTOL stock.
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Update - Sept. 30
Honda wants to enter the eVTOL market with an aircraft certified by 2030. My guess is that they end up buying someone like Archer Aviation with the valuations so low.
-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.
Update - Sept. 15
Deal approved, but with nearly 50% of shares redeemed greatly reducing cash balances. These SPACs are gonna have to start raising funds. Archer Aviation is down below $10 today and will probably end up trading into the $8s like Joby Aviation (JOBY).
-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.