Archer Aviation Shares Plummet 5% Amid Boeing Deal Fallout

Archer Aviation's shares took a hit on Friday, dropping by 5.24% to close at $6.60. This decline comes after the company announced a major deal with Boeing, which involves Archer trading shares worth approximately $1 billion in exchange for access to three Boeing assets: Wisk's autonomous flight technology, SkyGrid's airspace management software, and Insitu's lucrative drone business.

Insitu generates over $200 million in revenue annually, offering immediate exposure to the defense sector. According to CEO Adam Goldstein, demand for intelligence, surveillance, and reconnaissance drones is at an all-time high.

The deal is expected to close before the end of the year, but investors are awaiting transaction disclosures that will provide details on share issuance and closing terms. Boeing will obtain shares amounting to 19.75% of Archer's Class A shares outstanding prior to the deal closing, resulting in approximately 16.5% dilution for existing shareholders.

Archer's market capitalization is near $5.1 billion, making the newly issued shares worth roughly $1.01 billion. While the rally from the Boeing agreement was partially wiped out by Friday's decline, Archer still ended the week 10.6% higher than its deal-day closing price.