Archer Aviation Inc (NYSE: ACHR) saw its shares decline approximately 5% to $4.79 during Thursday's trading session, extending a five-day losing streak that has wiped out 14.6% of the stock's value. The decline comes as the company faces a critical shareholder vote on Friday that will determine whether it can move its legal domicile from Delaware to Texas.
The vote, scheduled for the company's annual meeting on June 26 at 12 p.m. Pacific time, requires approval from a majority of all outstanding shares — not simply a majority of votes cast. This higher threshold means that abstentions and broker non-votes will effectively count as votes against the proposal. With approximately 759.6 million shares eligible to vote, the company needs at least 379.8 million votes in favor to pass the measure.
Archer's management and board together control about 40.3 million votes, representing roughly 5.3% of total shares outstanding and only about 10.6% of the required minimum. This leaves the company needing to secure approximately 339.5 million additional votes from outside shareholders, a significant challenge for a retail-heavy stock like Archer, where low turnout could effectively kill the proposal.
CEO Adam Goldstein has been actively urging shareholders to vote, warning that the proposal "won't pass unless 50% of our outstanding shares support it." In a controversial move, Goldstein referred to proxy advisory firms ISS and Glass Lewis as "corporate terrorists" on social media, according to TipRanks. Archer's proxy statement notes that Texas law requires proxy advisers to focus solely on shareholders' financial interests when advising on Texas companies, though the Texas attorney general is currently blocked from enforcing this law against ISS and Glass Lewis.
The company argues that moving to Texas would provide better governance under the Texas Business Organizations Code and business courts, with no impact on its headquarters, operations, staff, management, assets, liabilities, or NYSE listing. Shares will continue to trade under the ticker ACHR regardless of the outcome.
Archer's stock decline far outpaced the broader market, as the Russell 2000 gained 0.7% on Thursday and is up 0.9% for the week. Rival Joby Aviation Inc (NYSE: JOBY) also slipped 4.5% to $8.87.
The pressure on Archer shares comes amid ongoing funding needs for certification and production of its eVTOL aircraft. The company ended the first quarter with $1.78 billion in cash, cash equivalents, and short-term investments, but reported a $172.5 million adjusted EBITDA loss for the quarter. Management expects an adjusted EBITDA loss of $170 million to $200 million in the second quarter.
At the midpoint of that forecast, Archer's cash and short-term investments represent about 9.6 times its quarterly adjusted EBITDA loss, before capital expenditures and working capital changes. The company burned $188.8 million in cash during the first quarter, with $149.1 million going to operations and $32.6 million to property and equipment.
Despite the near-term challenges, Goldstein has positioned Archer as "far more than an air taxi company," highlighting its defense and AI software work. For now, however, investors are focused on whether enough shareholders will cast their votes by Friday to approve the company's planned move out of Delaware.
