Cathie Wood’s Ark Invest funds continue to load up on shares of electric vertical take-off and landing (eVTOL) aircraft maker Archer Aviation (NYSE:ACHR).
Specifically, Cathie’s Ark — which reports the exchange-traded fund (ETF) group’s trades — shows that the ARK Innovation ETF (NYSEARCA:ARKK), ARK Autonomous Technology & Robotics ETF (BATS:ARKQ) and ARK Space Exploration & Innovation ETF (BATS:ARKX) all bought shares last month.
Archer now represents about 1% of ARKK’s holdings. Shares of ACHR stock opened trading today, Sept. 8, at $6.39 per share. Further, the stock saw its high for the year, $7.49 per share, just in late August. Archer’s market capitalization is currently about $1.8 billion — and the company has yet to report any revenue.
ACHR Stock: Archer Flying High
All of Ark’s new trades were made after Archer signed a partnership with Boeing’s (NYSE:BA) Wisk Aero, ending a lawsuit accusing Archer Aviation of theft of trade secrets.
After the settlement, Archer also received $215 million in capital from an oversubscribed private investment in public equity (PIPE) fund. Stellantis (NYSE:STLA) was among the participants in that round. The company had liquidity of $675 million as of the middle of last month.
I wrote favorably about Archer back on Aug. 8 after the company signed a $142 million deal to supply six of its eVTOL craft to the U.S. Air Force. As you may have inferred from their name, eVTOLs take off, hover and land vertically using electric power. Delta Airlines (NYSE:DAL), American Airlines (NASDAQ:AAL) and United Airlines (NASDAQ:UAL) have all invested in the space, seeing eVTOLs as “air taxis” to get rich clients between country homes and major airports. United is backing Archer while Delta has invested in rival Joby Aviation (NYSE:JOBY)
In July, the Federal Aviation Administration (FAA) took the first step toward approving regular air taxi services. Commercial flights are expected to begin in 2025 and become more commonplace by 2028.
The next catalyst for Archer will be Sept. 12, when the company unveils its Midnight eVTOL aircraft to the public.
What Happens Next?
The cost to borrow Archer shares to short has risen lately. Short interest can paradoxically provide a stock with lift as investors get in to squeeze the shorts.
On the date of publication, Dana Blankenhorn did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
