Joby Aviation stock plummeted Thursday after surging 28% Wednesday following Toyota announcing an additional $500 million investment into Joby Aviation, bringing the legacy automaker's total stake in Joby to more that $890 million to support the commercial production of the startup's electric air taxi.
Shares of Joby declined 8.7% to 5.61 during Thursday's market action. On Wednesday, Joby Aviation stock rocketed 28% to 6.14. Meanwhile, Toyota's American depositary receipts dropped 2.4% to 176.17 Thursday after adding 1.4% the previous trading session.
Toyota's $500 million investment in Joby Aviation will be made in the form of cash for common stock. The investment will be made in two equal payments, one slated for 2024 and the second to come next year, according to Toyota.
Joby Aviation Chief Executive Joeben Bevirt said in a the press release that Wednesday's investment "builds on nearly seven years of collaboration between our companies."
The California-based outfit recently rolled its third aircraft off its pilot production line in. Joby is breaking ground on an expanded manufacturing facility.
"The knowledge and support shared by Toyota have been instrumental in Joby's success and we look forward to deepening our relationship as we deliver on our shared vision for the future of air travel," Bevirt said.
Deutsche Bank analyst Edison Yu on Thursday wrote he had "mixed reactions" to the additional investment. Yu noted that Toyota will become the largest single shareholder of Joby with a greater than 20% stake.
However, Yu also believes the $500 million won't be enough and that the startup will likely need another $300 million-$500 million late next year or in early 2026. Deutsche Bank has a sell rating on Joby with a price target of 4.
Toyota stock ranks eighth in IBD's Automakers industry group. TM has a 39 Composite Rating out of 99. Additionally, the stock has a 19 Relative Strength Rating and its EPS Rating is 82 out of 99.
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