Joby, Archer Stocks Got Crushed. This Is Why

Dow Jones
2024-12-03

Joby Aviation stock and shares of smaller aerospace and defense companies took it on the chin Monday.

An unexpected management change in another industry might just have catalyzed some profit-taking.

Shares of electric vertical takeoff and landing, or eVTOL, aircraft manufacturers Joby Aviation and Archer Aviation fell 9.4% and 23.7%, respectively, on Monday while the S&P 500 gained 0.2% and the Dow Jones Industrial Average fell 0.3%.

Archer shares were hit hardest, and the best bet to explain that move is auto maker Stellantis—CEO Carlos Tavares resigned unexpectedly over the weekend. Stellantis is an investor in Archer. The leadership turnover appears to have made investors nervous about the future of that relationship.

Stellantis and Archer didn’t immediately respond to a request for comment.

The selloff ate into recent gains. Joby shares rose about 86% in November. Archer shares added 204%. A positive analyst report in November helped catalyze those jumps.

Big moves aren’t isolated to those two companies. Shares of drone parts maker Unusual Machines fell 19.5% Monday after gaining 89% and 85% in the prior two trading sessions. News that Donald Trump Jr.was named an advisorto the company sent shares soaring.

Shares of space start-ups Rocket Lab USA and Intuitive Machines both fell about 11% on Monday. Rocket Lab stock gained 155% in November. Intuitive stock added 110%.

Solid earnings reports from both companies in November helped maintain momentum. Rocket Lab shares gained 28% after its third-quarter earnings report on Nov. 12. Intuitive shares fell 13% after its third-quarter earnings report on Nov. 14, but the stock was still up about 28% for the week.

As for Unusual Machines stock, only one analyst covers the company, according to Bloomberg. ThinkEquity’s Ashok Kumar rates shares Buy. His price target, set in June, is $4 a share. Shares were below that level about a week ago. The stock was at $16.16 in midday trading Monday.

The combined market capitalization of the five stocks mentioned is about $24 billion, and more than half of that is made up by Rocket Lab. They are relatively small companies that have seen their stocks go parabolic in recent trading.

It has been a wild Monday so far. For now, investors have to wait and see what happens next.

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