I am pleased to announce that I will be making a new investment today, and for those that have followed my investment adventures for a while you will be familiar with the name. Today I intend to buy 12,000 shares of…
Vertical Aerospace (NYSE: EVTL)
When I was last invested in this company in January, and wrote about Vertical Aerospace: Rising Like a Phoenix!, I forecast a share price of $7.26 by about April / May this year. Clearly in January I could not foresee the entirety of the then new US administration’s later proposed tariff arrangements that caused chaos in the markets from April onwards, although I did entirely exit the US markets in late February as I was concerned about the general direction of travel. At the time capital preservation was my priority given the unchartered territory we seemed to be approaching.
Despite the global stock market volatility that ensued with many stock prices crashing, Vertical’s share price came within a whisker of my forecast a little later than expected, achieving $7.06 on July 3rd.
Having monitored the progress of this exciting electric vertical take-off and landing (eVTOL) manufacturer, and potentially stunning VX4 aircraft, I will be pleased to be invested again. Albeit the timeframe for this proposed investment will be regularly reviewed, as while I expect to see somewhere north of $7 again in the near term, that is conditional upon news of a successful transition flight by the end of this year as announced by the company in September. Without that the share price may well wallow or dip, and dramatically so if it fails the transition flight!
I am personally expecting a successful transistion flight and for it to take place in November, rather than December. Having assessed the typical weather patterns for southern England where flight testing takes place, snow and wind are more prevalent in December (duh!), so if I was scheduling a flight and the aircraft and crew were ready, that’s what I would do if safely practicable. So my new forecast and target is for $7.00+ by late November / December, a 59% increase on yesterday’s closing price.
I hope to be invested in Vertical Aerospace for many years given its current and significant valuation discount to market leading US competitors Archer Aviation (94% discount) and Joby Aviation (97% discount) however, I have not lost sight of the fact that Vertical needs capital. A lot of capital to see it through to certification which is scheduled for 2028. That will likely mean dilution and while I broadly support dilution to accelerate a company’s progress (just look at how it has helped Archer and Joby!) I will remain on my toes and regularly review my position in the company depending upon the details that may be announced.
All things going well, in my opinion Vertical Aerospace could be worth 10x, 20x or even 30x+ in the years and decades ahead, however I will be taking every day as it comes and hope to at least see some significant gains in the short term.
May fortune favour the brave!
Mark aka Double Bubbler
