TLDR
- Joby Aviation (JOBY) stock plunged 9.1% in premarket trading following news of a $1.2 billion capital raise through debt and equity.
- The electric air taxi developer priced $600 million in convertible notes at 0.75% interest and $600 million in stock at $11.35 per share.
- Net proceeds will fund aircraft certification efforts, with Middle East approval targeted for mid-2026 and U.S. approval for late 2026.
- The company currently spends about $500 million annually and doesn’t yet generate meaningful revenue.
- Wall Street projects $1.2 billion in annual sales by 2029, but analyst support remains weak with only 18% Buy ratings.
Joby Aviation shares dropped sharply Thursday morning after the electric aircraft maker revealed plans to raise more capital than originally planned.
The stock tumbled 9.1% to $12.15 in premarket trading. That marks a sharp decline from Wednesday’s closing price of $13.37.
Joby disclosed it would raise $1.2 billion through concurrent public offerings. The total exceeded its previously announced $1 billion goal.
Existing shareholders are taking the news hard. More shares outstanding means their ownership gets diluted.
But the capital raise shouldn’t shock anyone following the company. Joby burns through approximately $500 million each year developing its electric vertical takeoff and landing aircraft.
Dual Offering Structure
The funding package splits into two components. Joby is selling $600 million in convertible senior notes due in 2032.
These bonds pay 0.75% interest semiannually. Holders can convert them into stock at $14.19 per share.
That conversion price sits 25% above the offering price for the common stock. It gives bondholders a potential equity kicker down the road.
The equity portion totals $600 million in common stock. Joby priced these shares at $11.35 each, a discount to current market levels.
The company will issue 52.8 million new shares. Morgan Stanley is also offering 5.3 million borrowed shares to help note investors hedge their positions.
Both deals settle on February 2, 2026. Underwriters received options to buy up to $90 million more notes and 7.9 million additional shares within 30 days.
Joby set up capped call transactions with a $22.70 per share ceiling. This mechanism helps limit dilution when bondholders convert their notes to equity.
Expected net proceeds total approximately $576 million from stock and $582.9 million from notes.
Funding the Path to Revenue
Joby will use about $55 million for the capped call transactions. The remaining cash supports multiple priorities.
Aircraft certification represents the biggest hurdle. The company needs regulatory approval before it can begin commercial operations.
Joby expects to clear certification in the Middle East during the first half of 2026. U.S. certification should arrive in the second half of the year.
Manufacturing buildout requires substantial investment too. The company recently bought a massive facility in Dayton, Ohio spanning over 700,000 square feet.
Production is slated to double to four aircraft per month by 2027. Preparing commercial operations and general corporate needs will consume the rest.
Right now, Joby generates virtually no revenue. The business depends entirely on reaching certification milestones.
Analysts predict sales will reach $1.2 billion annually by 2029. At current prices, shares trade for roughly 10 times those projected 2029 revenues.
That’s a premium valuation for a pre-revenue company. Most analysts remain cautious, with just 18% rating the stock a Buy.
For context, the average S&P 500 stock gets Buy ratings from 55% of covering analysts. The average target price for Joby stands at $13.
Despite Thursday’s decline, the stock has rallied 60% over the past 12 months. Morgan Stanley, Allen & Company LLC, BofA Securities and Goldman Sachs are managing the offerings.
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