4. Archer Aviation Inc. (NYSE:ACHR)
Short Interest as % of Shares Outstanding: 17.81%
Number of Hedge Fund Investors In Q3 2024: 24
Ark Invest’s Q3 2024 Stake: $71.3 million
Archer Aviation Inc. (NYSE:ACHR) is a new-age company that is developing electric vertical take-off and landing (eVTOL) aircraft. These aim to primarily target the urban air mobility market, and they also make the high short interest unsurprising. Archer Aviation Inc. (NYSE:ACHR) faces risks from two key fronts. Firstly, since eVTOL aircraft are a new vehicle class, the firm is dependent on the Federal Aviation Administration’s (FAA) approvals for its vehicles. A large portion of Archer Aviation Inc. (NYSE:ACHR)’s story depends on its Midnight aircraft. The firm’s shares have been on quite a ride this November. They soared by a whopping 204% during the month on the back of positive news such as Archer Aviation Inc. (NYSE:ACHR) being able to sell planes in Japan. However, the shares are down by 29.5% since then particularly due to automotive giant Stellantis’ troubles. Looking ahead, regulatory approvals and key deals for its aircraft will prove to be key catalysts for the shares.
Archer Aviation Inc. (NYSE:ACHR)’s management shared details about its commercialization plans and the Stellantis partnership during the Q3 2024 earnings call. Here is what they said:
“To support our commercialization plans, I’m proud to share that we are set to open our manufacturing facility in Covington, Georgia in the coming weeks. Our team has delivered this facility on time and on budget at a cost of approximately $65 million. At scale, this facility will be capable of producing up to 650 aircraft per year, setting a powerful foundation for us to scale our production alongside our operations. Now that we have substantially completed construction, we’re on track to begin loading in the manufacturing line equipment by year-end, with our first line set to become operational early next year. From there, we plan to ramp up to a production rate of two aircraft per month by year’s end. Stellantis continues to be a deeply committed partner on this journey to help us achieve scaled manufacturing.
As I discussed last quarter, we have an agreement in principle with Stellantis for them to contribute up to an additional approximately $400 million of capital to help scale the manufacturing of our midnight aircraft at this facility. Earlier this week, we announced that we are now seeking shareholder approval of that deal and aim to finalize it by the end of the year. The goal of the structure with Stellantis is to secure future capital for manufacturing growth without taking any unnecessary dilution of a large capital infusion today. We’ll continue to manufacture our powertrain and a select number of test aircraft at our California low-rate production facilities, ensuring continuity for our R&D and test needs. We’re confident this strategy will support a reliable and scalable production flow as we prepare for commercial operations.”
