When privately held companies debut on the public markets, growth investors often take notice. Investing in companies when they first become available to retail investors provides an opportunity to reap the rewards of young businesses as they start to grow and mature -- hopefully -- into well-established industry leaders.
Such is the case with ArcherAviation(NYSE: ACHR), which first traded on the New York Stock Exchange on Sept. 17, 2021, after merging with a special purpose acquisition company. Archer has made notable progress in its efforts to bring air taxi service to customers with its electric vertical take-off and landing aircraft.
Yet, early investors haven't seen their investments soar in value, besieged instead by considerable turbulence. Why is that? And could this be an opportunity now?
Archer stock has largely missed the mark since 2021
On the inaugural day, Archer shares opened at $9.90, rising as high as $10 but ending their first trading session at $9.48. Since then, the stock has steadily lost altitude and trades just above $3 a share. Investors who bought Archer stock the day it began trading after its SPAC merger was completed are down about 66%. Those who invested $10,000, consequently, are left with about $3,400 of their original investments.
The stock's decline belies Archer's many accomplishments over the past two years. For one, the company inked a manufacturing agreement with automaker Stellantis(NYSE: STLA) regarding production of the company's Midnight aircraft, which is expected to commence in 2025. Also, Archer has made significant progress toward receiving the required FAA certifications for its aircraft.
Has the time come to disembark and leave Archer stock?
Archer stock may have failed to climb higher during the last two years, but it's important to remember that it's only the early innings for the start-up. Companies attempting to disrupt industries frequently face challenges during their plights, and their shares, likewise, often experience volatility. For prospective Archer investors, a more pressing matter is whether the company continues making progress toward receiving FAA certification and whether it's able to commence commercial operations.
Should you invest $1,000 in Archer Aviation right now?
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Scott Levine has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
