Entrepreneurship

Air Taxi SPAC Stock Soars As United Airlines Eyes Big Archer Order

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Air taxi startup Archer secured an investment from United Airlines (UAL) after announcing plans to go public via a blank-check merger.




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The carrier invested $20 million and said it could buy as many as 200 of Archer’s aircraft, which would be worth more than $1 billion.

Archer is set to debut its eVTOL (vertical take-off and landing) aircraft later this year. The plane can carry up to four passengers for up to 60 miles with speeds up to 150 miles per hour.

United plans to use the Archer air taxis to get passengers to and from airports in bustling cities.

“Archer’s eVTOL design, manufacturing model and engineering expertise has the clear potential to change how people commute within major metropolitan cities all over the world,” United CEO Scott Kirby said in the release.

Archer also announced Monday that it would go public through a “blank check merger” with Atlas Crest Investment (ACIC), a special purpose acquisition company. Archer will be listed on the NYSE under the ticker symbol ACHR.

The merger is expected to yield $1.1 billion in gross proceeds and value Archer at $3.8 billion.

United shares rose 1.3% to 43.88 on the stock market today, and Atlas Crest Investment jumped 27% to 14.27.


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Air Taxis Face Crowded Skies

SPACs offer a way for private companies to go public without an IPO. Instead of selling stock, the private enterprise mergers with a shell company that’s already public and have become popular in recent years with Virgin Galactic (SPCE) and electric truck maker Nikola (NKLA) taking the same route.

While roads might be congested with cars now, Archer enters a very crowded space for air taxis.

Joby Aviation is also reportedly looking at SPACs to take it public, according to a Reuters report last month. Joby is also buying Uber’s (UBER) air taxi business, which includes partners like Textron‘s (TXT) Bell, Brazil’s Embraer (ERJ) and Boeing’s (BA) Aurora Flight Sciences.

Meanwhile, Intel (INTC) is backing air taxi company Volocopter, which applied for certification from U.S. and European aviation regulators last month.

Follow Gillian Rich on Twitter @IBD_GRich for aviation news and more.

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