Cathie Wood Buys 5 Million Shares Of This Airline Sold For Under $10/Per Share – Is It A Good Buy For You?

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Every great investor has a different preferred sector, but two things they have in common are excellent vision and timing. Not that they win every time, but more often than not, their instincts are proven right in the long run. With that in mind, Cathie Wood’s recent purchase of five million shares of Archer Aviation takes on a different meaning now that the company has announced a reverse stock split.

Cathie Wood, CEO of ARK Investhas always had a reputation for making aggressive trades in the technology sector. So when he bought five million shares of vertical takeoff and landing (VTOL) company Archer Aviation at the end of 2023, it seemed par for the course. At the time, Archer’s stock was trading below $10 per share, which created tremendous upside for traders with the means to buy millions of shares at a time.

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Archer’s business model revolves around the development of personal flying vehicles that serve as “air taxis“to move travelers from place to place much easier than cars. It’s a concept from The Jetsons or a 1960s TV show that tries to imagine what transportation would be like in the 21st century. At the time of the purchase of Wood, which was spread over several months, many positive developments took place in Archer.

In December, Archer partnered with Anduril, a defense contractor that makes autonomous military applications and products. Archer paired that announcement with news that it had raised another $340 million in equity from United Airlines and Stellantis, both of which own equity in Archer. It looked like it was all systems go for a big 2025 and then Archer announced a reverse stock split.

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At a December 20 stockholder meeting, Archer stockholders approved a proposal to “increase the authorized number of shares of the Company’s Class A common stock available for issuance from 700,000 .000 to 1,400,000,000”. The company also changed its bylaws to limit ownership, control or even investment in the company to US citizens.

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