TLDR
- Joby Aviation (JOBY) stock fell 9.1% in premarket trading after announcing a $1.2 billion capital raise exceeding its initial target.
- The company priced $600 million in 0.75% convertible notes maturing in 2032 and $600 million in common stock at $11.35 per share.
- Funds will support certification goals for mid-2026 in the Middle East and late 2026 in the U.S., plus manufacturing expansion.
- Convertible notes feature a $14.19 conversion price with capped calls at $22.70 to reduce shareholder dilution.
- Despite a 60% gain over the past year, only 18% of analysts rate the stock as a Buy.
Joby Aviation faced selling pressure Thursday morning after unveiling a capital raise that topped its original forecast.
Shares dropped 9.1% to $12.15 before the opening bell. The decline came after Wednesday’s close at $13.37.
The electric air taxi developer announced it would raise $1.2 billion across two offerings. That figure exceeded the company’s previously stated $1 billion target by 20%.
Investors reacted swiftly to the news. Additional shares mean existing stakeholders see their ownership percentages decrease.
The market response makes sense given the dilution factor. Still, Joby’s capital needs are well-documented among those tracking the stock.
The company spends roughly $500 million annually while building its business. Revenue remains minimal as aircraft await regulatory certification.
How the Raise Is Structured
Joby designed a two-part funding strategy. The first piece involves $600 million in convertible senior notes.
These notes mature on February 15, 2032. They carry a 0.75% annual interest rate paid in two installments each year.
Noteholders can convert their bonds into stock at $14.19 per share. That price reflects a 25% premium over the common stock offering price.
The equity component brings in another $600 million. Joby set the price at $11.35 per share for 52.8 million new shares.
That price represents a discount to where shares traded Wednesday. Morgan Stanley is also offering 5.3 million borrowed shares for hedging transactions.
Both offerings close February 2, 2026. Underwriters hold 30-day options to purchase $90 million in additional notes and 7.9 million more shares.
Joby entered capped call agreements with a $22.70 per share limit. These transactions aim to minimize dilution when bondholders convert to equity.
Net proceeds should reach approximately $576 million from stock and $582.9 million from notes.
Spending Plans and Timeline
Roughly $55 million will fund the capped call transactions. The balance supports several key initiatives.
Certification stands at the top of the priority list. Joby must secure regulatory approval before launching commercial service.
The company targets Middle East certification during the first half of 2026. U.S. approval should follow in the second half.
Manufacturing capacity requires substantial investment. Joby recently acquired a Dayton, Ohio facility exceeding 700,000 square feet.
Output is expected to double to four aircraft monthly by 2027. Commercial operations setup and corporate expenses will absorb remaining capital.
Joby currently generates almost no sales. The business model hinges on receiving certification and beginning passenger operations.
Market Outlook and Valuation
Wall Street forecasts annual revenue of $1.2 billion by 2029. Shares currently trade at about 10 times those projected sales.
That valuation multiple looks stretched for a company without meaningful current revenue. Analyst sentiment reflects this caution.
Just 18% of analysts covering Joby rate shares as a Buy. The average Buy rating across S&P 500 stocks stands at 55%.
The consensus price target sits at approximately $13. That aligns closely with Wednesday’s closing price before the announced raise.
The stock has climbed 60% over the trailing 12-month period. Thursday’s premarket drop represents a pullback from those gains.
Morgan Stanley, Allen & Company LLC and BofA Securities serve as lead underwriters for the stock offering. Goldman Sachs joined as a manager for the convertible notes.
