Joby Aviation Stock Is a Fun, Risky Bet on an Electric Air-Taxi Startup
Since commercial aviation contributes more than 2% of the world’s carbon emissions, California-based electric aircraft maker Joby Aviation (NYSE:JOBY) seeks to address this issue. Investors can easily buy JOBY stock now that it is trading on the New York Stock Exchange.
Joby is actually the first U.S.-based eVTOL (electric vertical takeoff and landing) company listed on a public market to trade on the NYSE. eVTOL vehicles are electric, and they function similarly to drones.
Since eVTOL vehicles are fairly new innovations in the aerospace industry, there’s risk involved with owning JOBY stock. It’s too early to know whether these electric flying cars will be the “next big thing” in the markets.
Joby’s shares have fallen since the stock’s NYSE debut, so their recent decline may have created a good dip-buying opportunity now. This is the type of investment that you can have fun with, as long as you don’t make it an excessive percentage of your portfolio.
A Closer Look at JOBY Stock
On Aug. 11, 2021, JOBY stock opened for trading on the NYSE after Joby Aviation reverse-merged with a special purpose acquisition company, or SPAC, Reinvent Technology Partners (NASDAQ:RTPY).
The debut was auspicious, as the stock opened at $10.62 and then surged 20%. It even threatened to break through $14 at one point.
Unfortunately, it wasn’t a smooth ride for the shares after that. Over the following week, JOBY stock lost significant value, landing at $8.81 on Aug. 18.
Thus, if you’re looking for a stock with strong upward momentum, this doesn’t fit the bill. Yet there’s another way to view the situation.
Owning JOBY stock, in the final analysis, should be a way to benefit from a long-term thesis that proves to be accurate. And the thesis is that the market for electric-flying taxis will expand significantly at some point in the future.
So the short-term share-price fluctuations of JOBY stock might not matter too much. Just please don’t load the boat on this stock, since it may be highly volatile.
An Electric Alternative
Joby Aviation actually isn’t a brand-new company, as it was founded in 2009 by its CEO, JoeBen Bevirt.
The company seeks to make air travel cleaner and quieter by providing an electric alternative to traditional planes and helicopters for short trips.
Investing in Joby Aviation will require patience and a forward-looking vision. That’s because the company plans to make its eVTOL aircraft available to consumers in 2024.
In other words, owning JOBY stock is basically investing in the future of short-trip air travel.
So you might just want to take a “set it and forget it,” buy-and-hold approach with this stock.
Off to a Good Start (Sort Of)
Reportedly, the SPAC deal will bring Joby Aviation over $1 billion.
So, financially speaking, we could say that the company is off to a good start.
Joby Aviation apparently intends to use the funds derived from the SPAC deal to earn Federal Aviation Administration certifications, build electric aircraft and make the company’s air-taxi service operational in the U.S.
That all sounds encouraging, but as we’ve seen, JOBY stock isn’t off to a great start.
Still, the stock’s long-term outlook could be positive. Impressively, Joby Aviation has completed more than 1,000 test flights, including a record 154-mile flight in July.
Plus, Joby Aviation achieved a milestone, as the company has the first eVTOL to be awarded an airworthiness status by the U.S. Air Force.
What investors should watch for in the future is the company’s efforts to earn Federal Aviation Administration certifications.
If Joby Aviation is successful on that front, then its share price could move higher quickly.
The Bottom Line
It’s okay to dream of a future that includes flying taxis. If that sounds intriguing to you, then feel free to buy a small amount of JOBY stock.
Just make sure that you understand the risks posed by it.
After all, there’s no guarantee that the eVTOL market -and Joby Aviation’s share price -will take off.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
