Joby Aviation Shares Plunge 16.7% on $1.38 Billion Capital Raise Plan
Joby Aviation (NYSE: JOBY) saw its stock price plummet 16.68% on Thursday, closing at $11.14, following the company's unveiling of a plan to raise approximately $1.38 billion in new capital. The sell-off reflects investor apprehension over the dilutive effect of the proposed share and note issuance on existing holdings.
The fundraising initiative is structured in two parts. First, Joby plans to offer $690 million in convertible senior notes due in 2032, with an option for underwriters to purchase an additional $90 million. Second, the company intends to sell roughly 60.8 million new shares of its common stock to the public, which could increase by another 7.9 million shares if an overallotment option is exercised.
The notes will carry a modest annual interest rate of 0.75% and can be converted into common stock at a rate of approximately 70.48 shares per $1,000 note. According to a company statement, the proceeds are earmarked to accelerate certification and manufacturing efforts for its electric vertical take-off and landing (eVTOL) aircraft, fund the ramp-up to commercial operations, and provide general working capital.
This capital push comes just weeks after Joby announced the acquisition of a second manufacturing facility in Ohio, aiming to scale production to four air taxis per month by 2027. The move underscores the immense capital requirements facing companies in the nascent urban air mobility sector, which must fund expensive certification processes and build manufacturing capacity before generating meaningful revenue.
Analyst & Investor Reactions:
"While dilution is a near-term negative, this capital secures Joby's runway through a critical phase," said Michael Thorne, a sustainable transport analyst at AeroVision Advisors. "The market is punishing the stock today, but successfully deploying this cash to achieve certification and start production is the real milestone that will determine long-term value."
"This is a brutal cash grab that hammers retail investors," argued Sarah Chen, a portfolio manager at ClearSky Capital, voicing a sharper critique. "Promising a future 'flying car' while repeatedly going back to the well for billions dilutes early believers. It highlights the sector's fundamental problem: these are science projects with endless funding needs and no proven commercial model."
"I'm holding my position," commented David Rivera, a private investor following the eVTOL space. "The volatility is expected in a pre-revenue company. If they execute with this war chest, today's drop could look like a buying opportunity in hindsight."
"The scale of funding needed shows how capital-intensive this race will be," noted Priya Sharma, a technology journalist covering aviation. "Joby is betting big that securing funds now, despite the stock hit, will give it a decisive advantage over competitors when the regulatory gates finally open."