Archer Aviation Inc. (NYSE:ACHR) saw its proposal to move its legal domicile from Delaware to Texas fall short of the required majority, even as more than 80% of the votes cast favored the change. The outcome leaves the company with an annual Delaware franchise tax bill of approximately $250,000 and does little to lift the stock from its recent lows.
The eVTOL developer's shares closed at $4.87 on Friday, up 1.67% for the session, but have dropped 10.31% over the past five trading days. After-hours trading saw the stock edge up to $4.9096 on volume of 8.62 million shares. The stock remains near its 52-week low of $4.71, with a high of $14.62. Year-to-date, shares are down 35.24%.
At the company's annual meeting, general counsel Aaron Goodman disclosed that the Texas redomestication proposal did not pass because it failed to secure a majority of the outstanding shares. With 759,598,009 Class A shares eligible to vote, the threshold required just over 379.8 million votes in favor. While over 80% of the shares voted supported the move, the total fell short. Archer is expected to file the final vote results in a Form 8-K within four business days.
The proposed change was modest in financial impact. Proxy materials indicated that moving to Texas would save Archer about $250,000 annually in Delaware franchise taxes, a sum representing less than 0.1% of the roughly $261 million worth of Archer shares traded on Friday. CEO Adam Goldstein had tied the proposal to the company's operational hub in Texas, urging shareholders to approve the shift.
Trading activity in Archer was notable on Friday, with about 7.0% of its market capitalization changing hands. This turnover ratio outpaced that of peers like Joby Aviation (NYSE:JOBY), which saw about 6.0% of its market cap traded, and BETA Technologies (NYSE:BETA) and Vertical Aerospace (NYSE:EVTL), which saw 1.1% and 1.0%, respectively.
Short interest remains elevated at 19.43% of the float, with 123.33 million shares sold short. The stock's five-day loss of 10.31% outpaced the S&P 500's 2% decline but was worse than the S&P 600's gain of just over 3% for the same period, according to NYSE data.
Archer closed the first quarter with $1.7759 billion in cash, cash equivalents, and short-term investments, plus $7.3 million in restricted cash. The company reported a net loss of $217.7 million for the quarter and expects an adjusted EBITDA loss between $170 million and $200 million for the second quarter. Despite the setback, CEO Goldstein emphasized in May that Archer is 'far more than an air taxi company.'
Investors are now awaiting the final vote count and any additional commentary from management. The outcome could influence the stock's direction in the near term, given the high short interest and proximity to the 52-week low.
