New York, Jan 29, 2026, 20:42 EST — Market closed
- Joby Aviation shares dropped roughly 17% following the announcement of an upsized stock-and-convertible offering.
- The deal comes to around $1.2 billion, with $600 million in convertible notes maturing in 2032.
- Traders are now focused on deal settlement set for Feb. 2 and the amount of new supply the market must absorb.
Joby Aviation shares fell sharply on Thursday, dropping 16.8% to $11.14. The electric air taxi maker unveiled a bigger-than-anticipated fundraising deal, introducing more stock and a new tranche of convertible debt.
Timing is key as Joby continues investing to certify and produce its aircraft. New funding stretches the runway but dilutes existing shareholders and might attract short-term hedge flows betting against the stock.
Investors often lash out at early-stage aerospace companies that aggressively tap markets, even if the reasons are clear: costs for certification, factories, and prepping for commercial service pile up well before any significant revenue appears.
Joby priced $600 million of 0.75% convertible senior notes due 2032, along with 52,863,437 common shares at $11.35 each, boosting the deal size from the earlier $1 billion target. The company also outlined a separate “delta offering” of 5,286,343 borrowed shares led by Morgan Stanley, aimed at helping some note buyers hedge; Joby won’t receive proceeds from that sale. The offerings are set to settle on Feb. 2, with underwriters holding 30-day options to pick up additional notes and shares. (Joby Aviation, Inc.)
Convertible notes are debt instruments that can later convert into stock, typically at a predetermined price. For Joby, that initial conversion price was set around $14.19 a share—a premium to the stock offering price. This setup can lower the coupon cost but still risks equity dilution if the share price bounces back.
Traders are zeroing in on the hedging angle. Joby’s prospectus lays out how delta shares get borrowed and sold to help “convertible arbitrage” investors hedge—often by shorting the stock against the notes. This setup can weigh on the shares until the fresh supply gets absorbed. (SEC)
Joby is expanding its manufacturing capacity as it moves closer to certification. In a Jan. 7 filing related to an Ohio facility purchase, CEO JoeBen Bevirt stated, “This site will not only support our near-term plan to double production,” highlighting the company’s push to shift from engineering to full-scale manufacturing. (Joby Aviation, Inc.)
Shares of other U.S.-listed eVTOL companies slipped as well, but Joby’s decline was notably sharper following its larger capital raise.
But the deal isn’t one-sided. Despite a capped-call structure meant to limit dilution from conversions, new shares start trading right away. The note-and-hedge arrangement might prolong the technical selling pressure. If certification drags or production ramps slower than anticipated, doubts will resurface about how frequently Joby will have to tap the markets again.
Traders will be focused on whether JOBY can find footing after Thursday’s sharp drop and how it performs as the Feb. 2 settlement approaches. Investors are also keeping tabs on the upcoming earnings report — listed on Investing.com for Feb. 25, 2026 — looking for updates on cash burn and certification timelines. (Investing)
