What happened
Shares of beleaguered air taxi stock Joby Aviation (JOBY 3.80%) -- which at one point delivered gains of 30% and more to its early special purpose acquisition company investors last year (only to lose all those gains and fall nearly 50% below the pre-IPO price) -- are continuing to crash in Tuesday trading.
As of 3:10 p.m. ET, Joby stock is down another 9.7%.
Image source: Getty Images.
So what
Why are investors selling off Joby today? Ask Barclays Capital.
This morning, Barclays initiated coverage of Joby stock with an equal weight rating and a $6 price target. On the one hand, that probably sounds like it should be good news -- $6 being more than what Joby stock sells for currently. On the other hand, though, Barclays' note contained a stern warning for investors in this once high-flying -- but always unprofitable -- air taxi stock:
"The market has soured on pre-revenue and other risky assets recently," reports The Fly, "as the prospect of increased interest rates and persistent pandemic disruption ripples through the economy." And while Joby might have a future in the long term, Barclays fears that the stock also carries "significant risk."
Now what
I'll say it has risk!
Not only does Joby have no profits, it also has no revenue. What's more, despite Barclays predicting the long term will prove kind to Joby, according to data collected by S&P Global Market Intelligence, very few analysts have anything hopeful to say about Joby whatsoever.
Fact is, the consensus prediction for Joby is that this stock won't generate any revenue at all before 2024. As for when the company might begin turning revenue into profit, no analyst will even hazard a guess. 2025, I suppose, is the earliest its investors might hope for. But the truth of the matter is that, right now, no one has any real idea when (if ever) Joby might earn a profit.
And the only real question is why Barclays Capital thinks this merits an equal weight rating for Joby stock, instead of a straight out-and-out sell.
