Joby Aviation Plans to Raise $1.2 Billion in New Stock and Debt
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2h ago
0mins
Source: NASDAQ.COM
- Funding Plan: Joby Aviation announced it will issue $1.2 billion in new stock and convertible debt, including $600 million in convertible debt and 52.9 million shares, leading to a 13.3% dilution for shareholders, negatively impacting investor confidence.
- Stock Price Reaction: Following the financing announcement, Joby's stock price fell by 17.2%, reflecting market concerns over its ongoing losses and lack of free cash flow, exacerbating investor anxiety.
- Underwriter Role: Morgan Stanley will sell 5.3 million shares of Joby's common stock for hedging transactions, which will not generate new cash for Joby but will increase the number of shares in circulation, further diluting existing shareholders.
- Future Outlook: Joby's funding plan could reach $1.4 billion, and while it may alleviate cash flow pressures in the short term, the ongoing dilution of equity and lack of profitability pose challenges for the company's future market performance.
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Analyst Views on JOBY
Wall Street analysts forecast JOBY stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for JOBY is 15.67 USD with a low forecast of 8.00 USD and a high forecast of 22.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
6 Analyst Rating
1 Buy
3 Hold
2 Sell
Hold
Current: 13.370
Low
8.00
Averages
15.67
High
22.00
Current: 13.370
Low
8.00
Averages
15.67
High
22.00
About JOBY
Joby Aviation, Inc. is a transportation company developing an all-electric, vertical take-off and landing air taxi. The Company is engaged in designing and testing a piloted all-electric, vertical take-off and landing (eVTOL) aircraft. The Joby eVTOL is designed to transport a pilot and up to four passengers or an expected payload of up to 1,000 pounds at speeds of up to 200 miles per hour (mph). The aircraft is optimized for urban routes, with a target range of up to 100 miles on a single charge. The Company plans to manufacture, own and operate its aircraft itself, building a vertically integrated transportation company that delivers transportation services to customers, including government agencies such as the United States Air Force (USAF) through sales or contracted operations, and to individual end-users through a convenient app-based aerial ridesharing service. It also offers a network of terminals and loyal flyers in markets like New York and in Southern Europe.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Joby Aviation's $1.4 Billion Financing Plan Dilutes Shareholders
- Financing Announcement: Joby Aviation revealed plans to issue $1.2 billion in new common stock and convertible debt, including $600 million in convertible notes and 52.9 million shares priced at $11.35 each, indicating urgent capital needs to sustain operations.
- Shareholder Dilution Risk: This financing will dilute existing shareholders by 13.3%, with a total of 121.6 million new shares expected, raising significant concerns about the company's future profitability among investors.
- Negative Market Reaction: Following the financing news, Joby's stock price fell by 16.23%, currently at $11.20, reflecting strong market unease regarding the company's financial health.
- Underwriter Options: Joby has also granted underwriters an option to purchase an additional $90 million in convertible debt and 7.9 million more shares, potentially increasing the total financing to $1.4 billion, further deepening investor anxiety.
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Joby Aviation Plans to Raise $1.2 Billion in New Stock and Debt
- Funding Plan: Joby Aviation announced it will issue $1.2 billion in new stock and convertible debt, including $600 million in convertible debt and 52.9 million shares, leading to a 13.3% dilution for shareholders, negatively impacting investor confidence.
- Stock Price Reaction: Following the financing announcement, Joby's stock price fell by 17.2%, reflecting market concerns over its ongoing losses and lack of free cash flow, exacerbating investor anxiety.
- Underwriter Role: Morgan Stanley will sell 5.3 million shares of Joby's common stock for hedging transactions, which will not generate new cash for Joby but will increase the number of shares in circulation, further diluting existing shareholders.
- Future Outlook: Joby's funding plan could reach $1.4 billion, and while it may alleviate cash flow pressures in the short term, the ongoing dilution of equity and lack of profitability pose challenges for the company's future market performance.
Continue Reading