Benzinga and Yahoo Finance LLC may earn commissions or revenue on some articles through the links below.
Every great investor has a different favorite sector, but two things they have in common are excellent vision and opportunity. It’s not that they always win, but more often than not, their instincts turn out to be correct in the long run. With this 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 Invest, has 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 in late 2023, it seemed normal. At the time, Archer stock was trading below $10 per share, creating a huge advantage for traders with the means to buy millions of shares at a time.
Don’t miss:
Archer’s business model revolves around developing personal flight vehicles that serve as “air taxis” to get travelers from one place to another much more easily 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 Wood’s purchase, which was spread over several months, several positive developments occurred at Archer.
In December, Archer partnered with Anduril, a defense contractor that makes autonomous military applications and products. Archer coupled that announcement with news that it had raised another $340 million in capital from United Airlines and Stellantis, which own equity in Archer. It seemed like all systems were pointing to a big 2025 and then Archer announced a reverse stock split.
See also: doCommercial real estate has historically outperformed the stock market, and This platform allows people to invest in commercial real estate with as little as $5,000 and offers a target return of 12% with an additional 1% return boost today!
At a December 20 shareholder meeting, Archer shareholders approved a proposal to “increase the number of authorized Class A common shares of the Company 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.
That change may be related to Archer’s new partnership with Anduril. If the company will provide products and services under military contracts, it will likely focus heavily on the US defense industry. Having foreign ownership of a company with that type of profile and customer base can compromise its ability to work on top secret projects.
Trending: This Jeff Bezos-backed startup will let you Become a homeowner in just 10 minutes, with minimum investments of just $100 for properties like Byer House from Stranger Things.
However, news of the stock split caused Archer’s share price to drop from the $11 range to its current price of $9.75. That could provide a golden opportunity for Cathie Wood to buy even more shares. Whether he will do so remains to be seen, but it seems clear that he believes strongly in the long-term future of Archer Aviation. If you missed your chance to get in when the price was below $10, you can still buy the dip before this stock recovers.
Either way, Cathie Wood and ARK Investments will come out ahead. Public records show that Ark’s initial purchase of 2.5 million shares occurred between October 28 and November 13, when Archer was available for $3.20 and $4.20. He bought 2.5 million more shares on December 13 at $7.39 per share. So even with the drop in stock price due to the stock split, buying five million shares of Archer was a winning trade for Cathie Wood.
Wondering if your investments can help you achieve $5,000,000 in savings? Talk to a financial advisor today. SmartAsset’s free tool connects you with up to three vetted financial advisors serving your area, and you can interview your matched advisors at no cost. to decide which one is right for you.
Lower interest rates mean some investments won’t perform as well as in previous months, but you don’t have to lose those gains. Certain private market real estate investments are providing retail investors with the opportunity to capitalize on these high-yield opportunities.
Historically, the Arrived Home Private Credit Fund has paid an annualized dividend yield of 8.1%*which provides access to a pool of short-term loans backed by residential real estate. The best part? Unlike other private credit funds, This one has a minimum investment of only $100.
Looking for fractional real estate investment opportunities? He Real Estate Appraiser on Benzinga presents the latest offers.
This Article Cathie Wood Buys 5 Million Shares of This Aviation Stock Selling for Less Than $10 Per Share: Is It a Good Buy for You? originally appeared on Benzinga.com
