Joby Aviation (JOBY) Stock: Why Shares Dropped 9% Before the Bell

TLDR

• Joby Aviation (JOBY) shares fell 9.1% in premarket trading after the company announced a larger-than-expected $1.2 billion capital raise.
• The company is selling $600 million in convertible notes with 0.75% interest and $600 million in stock at $11.35 per share.
• Proceeds will fund certification efforts targeting mid-2026 for the Middle East and late 2026 for the U.S.
• The convertible notes convert at $14.19 per share, a 25% premium, with capped call transactions at $22.70 to limit dilution.
• Analysts forecast $1.2 billion in sales by 2029, but only 18% recommend buying the stock.

Joby Aviation shares took a hit Thursday morning after the electric vertical takeoff and landing aircraft developer unveiled a capital raise larger than expected.

Joby Aviation, Inc., JOBY

The stock fell 9.1% to $12.15 in premarket action. Joby had closed Wednesday’s session at $13.37.

The company announced it would raise $1.2 billion through two separate offerings. This surpassed its initial $1 billion target.

The funding comes as no surprise to investors familiar with Joby’s cash needs. The company burns roughly $500 million each year as it develops its electric air taxi business.

The Deal Breakdown

Joby structured the raise in two parts. The first involves $600 million in convertible senior notes maturing in 2032.

These notes carry a 0.75% interest rate paid twice yearly. The conversion price was set at $14.19 per share.

That conversion price represents a 25% premium over the stock’s offering price. It gives noteholders upside if shares rally above that level.

The second portion includes $600 million in common stock. Joby priced these shares at $11.35 each, below the current market price.

The company will issue 52.8 million shares at this price. Morgan Stanley is also offering 5.3 million borrowed shares for hedging purposes.

Both offerings close on February 2, 2026. Underwriters have options to purchase additional securities within 30 days.

Joby negotiated capped call transactions with a ceiling of $22.70 per share. These deals help reduce dilution when noteholders eventually convert their bonds.

The company expects to collect about $576 million from the stock sale. The notes should generate roughly $582.9 million.

Where the Money Goes

About $55 million will pay for the capped call transactions. The rest flows into several buckets.

Certification efforts top the list. Joby is racing to get regulatory approval in multiple markets.

The company targets Middle East certification in the first half of 2026. U.S. approval should follow in the second half of the year.

Manufacturing expansion also requires capital. Joby recently acquired a 700,000-square-foot facility in Dayton, Ohio.

The company plans to double production to four aircraft monthly by 2027. Commercial operations preparation and general corporate needs will absorb remaining funds.

Joby doesn’t generate meaningful revenue yet. The business model depends on getting aircraft certified and into service.

Wall Street projects annual sales will hit $1.2 billion by 2029. The stock currently trades at 10 times those estimated future sales.

That valuation looks rich to most analysts. Only 18% rate shares as a Buy, well below the 55% average for S&P 500 stocks.

The average price target sits at $13, roughly in line with Wednesday’s close. The stock has gained 60% over the past year despite Thursday’s pullback.

Morgan Stanley, Allen & Company LLC and BofA Securities are managing the stock offering. Goldman Sachs joined the group handling the convertible notes.

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