Grizzly Research Shorts Archer Aviation, Calls It The 'Nikola Of The Skies'

Grizzly Research said Wednesday it has taken a short position in Archer Aviation (ACHR), accusing the electric air-taxi maker of overstating its technological progress and relying on false PR to support its valuation.

Archer Aviation's stock was down 1.2% in morning trade, with retail sentiment on Stocktwits dipping lower within 'bearish' territory over the past day.“Archer Aviation has built a reputation as a leading publicly traded eVTOL company through misleading projections and PR, reminiscent of Nikola's tactics,” Grizzy Research said in its report. 

The short seller stated that it collaborated with aerospace engineers to evaluate Archer's flagship aircraft, the Midnight, and concluded that the design is“fundamentally flawed and likely uncertifiable” by regulators. It added that the company's $6 billion order book may be inflated with“questionable and fraudulent” commitments, noting that Archer's recent pivot towards the defence industry is nothing more than a“desperate” attempt to stay in the race.“The company lacks the resources and capacity to be a credible player in that field,” Grizzly said.

The company also noted that Archer's Memorandum of Understanding (MoU) with Air Chateu for 100 Midnight aircraft, valued at up to $500 million, was“implausible.” Grizzly highlighted that only one helicopter had been delivered so far, back in 2023. It added that Air Chateu lacked the scale or the capital for such a fleet. The short seller also pointed to other deals, including those with KakaoMobility and Future Flight Global, as lacking substance.

In contrast, Grizzly said rival Joby Aviation (JOBY) is making“tangible and impressive” progress on certification, infrastructure, and commercialization. Joby's stock edged 0.3% lower in morning trade, and retail sentiment on Stocktwits trended in 'bearish' territory over the past day.

“In conclusion, we believe ACHR's fragile foundation will soon collapse, akin to Nikola's downfall, as mounting deceptions unravel and investors demand accountability,” the short seller said in its report.

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