There are many new players vying for eVTOL market share, including Vertical Aerospace.
Courtesy Vertical Aerospace
Vertical Aerospace , the eVTOL maker, secured some expected funding from American Airlines , and shares of the aerospace startup were soaring Friday.
EVTOL is short for electric vertical takeoff and landing. The new generation aircraft are relatively low-priced and easy to fly and create visions of flying cars and air taxis that can reduce urban congestion with quiet-running electric motors.
There are many new players vying for eVTOL market share, including Vertical. Cash to develop the aircraft is key. And Vertical (ticker: EVTL) stock was rising nearly 29% after securing the funds. The S&P 500 and Dow Jones Industrial Average rose 1.7% and 2%, respectively.
The amount of the payment wasn’t included in the news release. Vertical didn’t immediately respond to a request for comment. Vertical also raised about $300 million in December 2021 by merging with a special purpose acquisition company.
The cash isn’t a complete surprise though. American (AAL) is a partner of Vertical Aerospace and ordered 50 aircraft in June 2021 with options to purchase 100 more.
“We are delighted to have reached this major milestone with American Airlines on our eVTOL partnership,” said Vertical founder and CEO Stephen Fitzpatrick in the company’s news release. “We are making zero-emissions flight a reality forpassengers travelling all over the world. We look forward to continuing our work with American and seeing the first red, white and blue VX4 come off the production line.”
The VX4 is the name for Vertical’s first aircraft.
Coming into Friday, Vertical Aerospace stock had declined about 57% this year and off about 84% from its 52-week high of more than $18 a share.
Inflation, rising interest rates and recession fears have sapped investor enthusiasm for more speculative ideas. Vertical Aerospace qualifies as one of those. The company doesn’t expect to generate sales until 2024.
Two analysts cover Vertical Aerospace stock. One rates shares Hold and one rates shares Sell.
Write to Al Root at allen.root@dowjones.com
Source: finance.yahoo.com