The flying taxi company Archer Aviation Inc. (ACHR) settled a lawsuit and instead agreed to work with the Boeing Company (BA). Archer shares soared around 37% after hours Thursday, but pared most of those gains to trade around 1% early Friday.
Key Points to Remember
- Archer Aviation and Boeing have settled multiple lawsuits alleging patent infringement and theft of trade secrets.
- Boeing will invest in Archer and the two companies will collaborate on autonomous technology.
- Archer Aviation has also benefited from significant investment from automotive conglomerate Stellantis in the form of a $70 million strategic financing deal.
What's wrong with Boeing Lawsuit?
Under the agreement, Wisk, Boeing's air taxi unit, will become Archer's exclusive autonomous technology provider. The legal battle between Archer and Boeing grew out of a 2021 lawsuit filed by Wisk alleging trade secret theft and patent infringement.
At the time , Wisk was a joint venture between Boeing and Kitty Hawk Corporation, an electric aviation startup backed by Google founder Larry Page. Archer counterattacked Wisk in 2021 and Boeing in 2022.
A nod to the FAA and $215 million more to fuel growth
Archer hopes to grow rapidly, especially after receiving the green light from the Federal Aviation Authority (FAA) to begin test flights of its Midnight eVTOL aircraft. The FAA approval comes after a month-long comment period on Archer's special airworthiness that ended in January.
Once the With approval secured, the company hopes to begin test flights in the coming weeks and then deliver its first aircraft to the Department of Defense under a $142 million contract.
Archer also received a $215 million injection from its latest funding round, driven primarily by Chrysler, Jeep and Ram owner Stellantis (STLA). In January, Stellantis entered into a $70 million strategic funding agreement with Archer, of which $55 million is still available. Other notable investors include Boeing, United Airlines (UAL) and Cathie Wood's Ark Invest.
Archer shares are up by more than 200% since the beginning of the year./>
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