Stock Market Today, Jan. 29: Joby Aviation Falls After Announcing $1.2 Billion Stock and Convertible Note Offerings

Joby Aviation (NYSE:JOBY), a developer of electric vertical takeoff and landing (eVTOL) aircraft for air taxi services, closed Thursday at $11.13, down 16.72%. The stock moved lower after Joby priced upsized concurrent stock and convertible note offerings around $1.2 billion. Investors are watching how the enlarged capital raise and dilution shape funding for certification and commercial launch plans.
Trading volume reached 145.5 million shares, about 475% above its three-month average of 25.3 million shares. Joby Aviation IPO'd in 2020 and has grown 6% since going public.

How the markets moved today

The S&P 500 slipped 0.17% to 6,966, while the Nasdaq Composite fell 0.72% to 23,685. Among eVTOL companies, Archer Aviation closed at $7.43, down 3.82%, as investors reassessed funding and technology roadmaps across the sector.

What this means for investors

One day after announcing it would raise $1 billion from convertible notes and issuing new shares, Joby Aviation bumped this figure to $1.2 billion. Half of this will come from convertible notes due in 2032, with the other $600 million coming from the sale of 53 million shares at $11.35. Joby burned over $500 million in cash in the last year, so this will be a good safety net as it continues its certification and manufacturing efforts.

That said, today’s drop was warranted, as the company’s share price now trades closer to its equity offering price. Today’s sell-off also reflects the 53 million shares issued, which increases Joby’s shares outstanding by 6% and further dilutes shareholder value.

Josh Kohn-Lindquist has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.