Shares of Joby Aviation (JOBY -9.15%) were moving lower today after the maker of electric vertical takeoff and landing (eVTOL) vehicles held a follow-on stock offering last night.
Investors tend to dislike being diluted by additional equity offerings, and the offering also seemed to price lower than the company was aiming for.
As of 10:48 a.m. ET, the stock was down 11.1% on the news.

Images source: Joby Aviation.
Joby loses altitude
After the market closed yesterday, Joby filed to sell $500 million in stock in order to fund certification and manufacturing and prepare for commercial operations, in addition to other corporate needs.
The company priced the offering at $16.85, 11% below its closing price at $18.91 yesterday. The stock opened up at $16.86 this morning and was fairly steady through morning trading.
Given the pricing of the offering, the sell-off isn't surprising. The offering is expected to close on Oct. 9 and will result in gross proceeds of $513.9 million, selling 30.5 million shares.
What it means for Joby
While Joby is building momentum toward commercialization in both transportation and defense, it's still a development-stage company with essentially no revenue now. Through the first half of the year, it recorded $15,000 in revenue and $331.1 million in operating expenses. The company finished the quarter with nearly $1 billion in cash and short-term investments.
At that rate, Joby clearly needs to subsidize its investments with outside funding, so the $513 million capital raise makes sense. The company is not expected to generate significant revenue until at least next year.
Though investors may not like the dilution, it's one of the trade-offs in investing in a pre-revenue company.