Joby Aviation IPO: Stock Begins Trading on NYSE

Joby Aviation Begins Public Trading

Joby Aviation has commenced public trading, marking a significant milestone 12 years after its inception by JoeBen Bevirt at his ranch located in the Santa Cruz mountains.

The air taxi developer initiated trading on the New York Stock Exchange on Wednesday, utilizing the stock ticker symbol “JOBY.” This followed the completion of a merger with Reinvent Technology Partners, a special purpose acquisition company.

Share Price and Valuation

As of 10:00 AM ET, the share price reached $11.01, representing a 9.8% increase from the previous day’s closing price.

Joby’s valuation following the transaction is now $4.5 billion, establishing it as the highest-valued entity within its sector. Furthermore, the company currently possesses the largest cash reserves.

Capital for Commercialization

Joby now has approximately $1.6 billion in total capital available to facilitate the commercialization of its air taxi services, anticipated in 2024.

This figure encompasses $835 million from private investment in public equity, alongside over $500 million in existing capital reserves.

SPAC Redemption Details

Reinvent Technology Partners reported to the Securities and Exchange Commission that roughly 63% of the 69 million ordinary shares were redeemed prior to the start of public trading.

Consequently, Joby gained access to $255 million from the $690 million held in trust by the blank-check firm.

Funding Adequacy

While substantial, the development of a novel transportation system demands significant capital investment.

Joby’s executive chairman, Paul Sciarra, conveyed to TechCrunch his confidence that the $1.6 billion will be sufficient to prepare the company for launch.

Key Priorities

Sciarra outlined three primary objectives: “We think that’s enough to execute on the things that matter over the next few years, and those are […] one, ensuring that we execute on the certification program; two, showing we can demonstrate our ability to repeatedly manufacturing these aircraft in a certifiable way; and then third and finally, the opportunity to lay the groundwork for commercial launch.”

Aircraft Development and Backing

Joby is currently developing a five-seat electric vertical take-off and landing (eVTOL) aircraft, which was unveiled in February to considerable interest.

The company benefits from the support of major investors including Toyota and JetBlue, and has recently issued a series of announcements in preparation for its public listing.

Company Transparency

Bevirt addressed perceptions of the company’s secrecy in an interview with TechCrunch, stating, “A lot of people talk about us as a secretive company.”

He clarified, “We’re not actually a secretive company, we just choose to do the work and then show our work, rather than talking about it and then doing it.”

Joby's Transition: From $RTP to Public Markets

In February, Joby announced its planned merger with Reinvent, a special purpose acquisition company (SPAC) led by LinkedIn’s co-founder, Reid Hoffman. This agreement incorporates several measures designed to foster sustained collaboration. These include a lock-up period for founder shares extending up to five years, alongside a vesting schedule tied to performance milestones.

Specifically, the earnout provisions won't be realized until the share price reaches $50, representing a $30 billion market capitalization for the company.

The Rise of SPACs in the eVTOL Sector

While not a novel financial instrument, SPACs have become increasingly prevalent as a route to public listing, particularly within the transportation industry. Many eVTOL startups have turned to SPACs to secure substantial capital infusions.

Archer Aviation was the first to announce a merger with a blank-check firm, paving the way for Joby, Lilium, and Vertical Aerospace to follow suit. However, indications suggest a potential cooling of investment enthusiasm. Archer Aviation recently reduced its valuation by $1 billion as part of a “strategic reset” of its deal with Atlas Crest Investment Corp.

Navigating Market Volatility

Fluctuations in the market are typical when dealing with companies that have yet to generate revenue. Despite achieving public company status and the associated accountability to shareholders, Joby’s core objectives remain consistent, according to Sciarra.

“External market forces are beyond our control,” Sciarra stated. “Joby has consistently focused on executing key initiatives. As we transition to a public entity, maintaining this focus – clearly communicating our plans and then delivering on them – is crucial. This builds trust, addresses skepticism, and instills confidence in investors and the public.”

Air Taxis: A Comparison of Approaches

The future of air taxis can be considered through the lens of two distinct technological trajectories: autonomous vehicles or electric vehicles. The autonomous vehicle landscape, around five years ago, was characterized by overly optimistic predictions regarding the timeline for fully self-driving cars, leading to the failure or acquisition of numerous companies.

However, Sciarra proposes that the current state of the eVTOL industry more closely resembles the early stages of electric vehicle development.

Joby’s aircraft is engineered to meet existing safety and certification requirements, operating with a trained pilot onboard – a model similar to conventional helicopters and airplanes. “We deliberately avoided adding the complexities of developing full autonomy alongside the challenges of creating a new aircraft and navigating the regulatory process.”