Vertical Aerospace wants the stock market to take it seriously

Log-in here if you’re already a subscriber

HEAR FROM THE AIR CURRENT

Leave this field empty if you're human:

Vertical Aerospace has a lot riding on the unveiling of its new aircraft design in London on Wednesday, Dec. 10. The U.K.-based electric vertical take-off and landing developer is relatively confident in the design itself, having completed its preliminary design review and locked in about 75% of the supply chain, according to CEO Stuart Simpson. What the company really cares about is what Wall Street thinks of the new configuration.

Vertical has made impressive flight test progress at a fraction of the spend of its competitors, yet its valuation remains much lower. While its stock has rallied over the past week, the company’s market capitalization remains well below $1 billion. California-based Archer Aviation, by comparison, has a current market cap of around $6 billion, while Beta Technologies’ is roughly $7 billion and Joby Aviation’s is around $14 billion.

A primary reason for this low valuation is the company’s meager fundraising record, largely attributable to a combination of poor timing and miscalculations by its previous leader. More recently, Vertical has been reluctant to raise money at a low stock price out of concern for diluting current investors, and yet prospective investors are wary of the company’s weak balance sheet, knowing that it still needs to spend hundreds of millions of dollars — at a minimum — to certify its aircraft and start generating meaningful revenue.

This is the “catch-22” that Simpson has been negotiating since late last year, when the company reset under the control of its new majority shareholder, Jason Mudrick. In an interview with The Air Current at the Dubai Airshow last month, Simpson laid out his case for why he thinks this week will mark a turning point.

Subscribe to continue reading...