6. Archer Aviation Inc. (NYSE:ACHR)
Short Interest as % of Shares Outstanding: 18.41%
Number of Hedge Fund Investors In Q2 2024: 21
Ark Invest’s Q2 2024 Stake: $89.6 million
Archer Aviation Inc. (NYSE:ACHR) is one of the few companies in the world that is developing electric vertical take off and landing aircraft, or EVTOLs. This makes it a high risk, high reward firm as potential successes in the business can unlock a sizeable market while failures, which are likely due to regulatory requirements and technological complexity, can be more costly. This makes it unsurprising that 18.4% of Archer Aviation Inc. (NYSE:ACHR)’s outstanding shares have been sold short. The firm’s key product is its Midnight aircraft, and right now, the airplane is working towards the crucial type certification from the Federal Aviation Administration (FAA). Key strengths for Archer Aviation Inc. (NYSE:ACHR) are its industry partnerships, which include big ticket names such as Stellantis and Boeing as well as a $6 billion backlog which includes orders for Midnight. Therefore, Archer Aviation Inc. (NYSE:ACHR) has to ensure it remains well funded to produce its aircraft once they are certified by the FAA. Any weakness on these fronts could translate into significant headwinds.
Archer Aviation Inc. (NYSE:ACHR)’s management shared details for its air carrier network planning during the Q2 2024 earnings call:
“It’s not enough to just build our order book. We also need to lay the foundation for where these aircraft will fly. Earlier this quarter, we showcased a detailed plan for our air taxi network in the San Francisco Bay Area. This network predominantly leveraged relationships we’ve built with existing aviation infrastructure operators across Silicon Valley, Napa, and the East Bay, including our partners Signature Aviation and Atlantic Aviation. In addition, we revealed our plans with Kilroy Realty for the [indiscernible] vertiport in the heart of South San Francisco, near some of San Francisco’s largest tech companies, including Genentech and Stripe. We also announced plans to develop operational concepts for a joint air taxi network with Southwest Airlines, California’s largest air carrier by passenger and flight volume, operating at 14 airports across the state.
By combining Southwest California airport hubs and frequent interstate flights with Archer’s planned network, the goal is to offer Southwest passengers even faster door-to-door journeys. Routes like Santa Monica to Napa could take less than three hours, nearly half of what they can take today. Today, we unveiled our plans for our air taxi network in Los Angeles. LA commuters spend over 100 hours every year stuck in traffic, and that’s not counting the drives they decide to skip because they didn’t want to spend the time in traffic. This planned network includes takeoff and landing locations at Los Angeles International Airport, USC, Orange County, Santa Monica, Hollywood Burbank, Long Beach, and Van Nuys, alongside our partners Signature and Atlantic Aviation, as well as United and Southwest Airlines.”
