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Archer Aviation (NYSE:ACHR) stock is up 2% and trending on social media this morning after the air taxi maker settled a lawsuit with Boeing (NYSE:BA). Under the terms of the deal, Boeing will invest in ACHR in return for ACHR stock.
Archer has developed electric vertical takeoff and landing aircraft (eVTOLs). The relatively small aircraft, which are supposed to ferry small numbers of people around metropolitan areas, take off and land like helicopters but are powered by electricity.
More About the Lawsuit and the Settlement
Wisk, Boeing’s subsidiary, which is also developing eVTOLS for use as air taxis, filed a lawsuit against Archer about three years ago, alleging that ACHR had violated its patents and used its technology without authorization.
Under the settlement announced today, Boeing will invest an unspecified amount in ACHR through a public equity (PIPE) financing round. Among the other firms investing in the $215 million round were automaker Stellantis (NYSE:STLA), United Airlines (NYSE:UAL) and Cathie Wood’s ARK Investment Management. Boeing’s investment will reportedly be used to jump-start the partnership between Wisk and Archer on autonomous flying.
Additionally, Wisk “will become the exclusive provider of autonomous flying technology to Archer” if the latter firm develops autonomous aircraft, The Verge reported.
Commenting on the deal with Boeing, Archer said: “This strategic relationship will leverage each company’s respective strengths and competencies with the goal of accelerating the commercialization of autonomous flight.”
The Price Action of ACHR Stock
Heading into today, Archer’s shares had risen 4% in the last five days, 19% in the preceding month, and 212% so far in 2023.
On the date of publication, Larry Ramer did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.