What happened
Shares in loss-making electric vertical takeoff and landing (eVTOL) company Joby Aviation (JOBY 0.40%) were down around 6.3% as of 3 p.m. ET.
The decline comes on down day for the broader market indexes, and on such days it's usual for investors to take some risk off the table and sell stock in speculative companies like Joby.
Image source: Getty Images.
In addition, the market digested the news that Boeing is to invest a further $450 million in Wisk Aero, an eVTOL company developing pilotless taxis. Industrial giant Boeing owns a majority stake in Wisk and is, therefore, a very serious rival to all the eVOTL companies trying to establish a foothold in the market.
So what
For reference, Wisk is developing a pilotless eVOTL taxi, while Joby and others have piloted planes. As such, if Joby's aircraft gets to the market, it will have a stolen a march on Wisk, as pilotless aircraft are expected to be approved a few years later. However, suppose the latter established its pilotless aircraft a few years afterward. In that case, its unique selling point (pilotless aircraft) and its substantial backing from Boeing could lead it to dominate the market.
That matters because speculative growth companies like Joby Aviation aren't valued based on a few years' sales before the giant mouse (Wisk) comes along second and eats the cheese. So instead, investors are hoping Joby can establish a lasting position in the market.
Now what
You could argue that nothing has changed with Joby, and you would be right. However, the fact that Boeing is taking the market very seriously raises the risk profile for Joby and others. In addition, it reduces the possibility that Boeing or another company interested in eVOTL will come along and buy Joby to grab a foothold in the market.
