![]()
A class action lawsuit has been filed on behalf of investors against Archer Aviation. Archer is alleged to have made misleading comments on the progress toward commercialization.
The Law Offices of Frank R. Cruz announced that the lawsuit had been filed on behalf of the people or entities that had purchased or acquired Archer securities between Sept. 17, 2021 and Aug. 15, 2023. Investors will have until Nov. 20 to file a lead plaintiff motion. The announcement stated that Grizzly Research had published a report on Aug. 16, alleging that Archer had relied heavily on edited videos of earlier flights in order to misrepresent the amount of flight testing that had been performed and the advancement of the eVTOL. Defendants include the company Archer Aviation, current CEO Adam Goldstein, former co-CEO Brett Adock, current CFO Mark Mesler and former CFO Ben Lu.It should be noted that this law firm and the research firm frequently target publicly traded companies with similar litigation and studies, and that a lawsuit, until adjudicated, represents the claims of only one side in a legal matter.
"We believe the company has made a series of misrepresentations the latest of which being a contract award from the DoD which led a 40% run up in the stock," Grizzly Research said in its report.
The report also claims that Archer is misrepresenting timelines for the manufacturing facility becoming operational and securing FAA certification for its eVTOL aircraft. After this news, the company's stock price fell $0.41 or 6.5 percent to nearly $5.94 per share, injuring its investors. The complaint against Archer alleges that throughout the Class Period defendants had made false or misleading statements and failed to disclose adverse facts about business, operations and prospects. The suit alleges that the defendants failed to disclose: that the company relied on heavily edited videos of earlier flights to exaggerate the amount of flight testing performed; the company misrepresented the nature of profitability of its business partnerships; the company was not likely to secure FAA certification within the timeframe represented to investors, delaying the start of commercialized production and sales; the company overstated its financial position and prospects; all of this, once revealed to the public, was likely to bring significant financial or reputational harm to the company; and as a result positive statements about the company have been misleading and lack a reasonable basis.RELATED STORY:Archer progresses in Midnight eVTOL certification process
Archer has consistently been at the front of the eVTOL race. The same day that Grizzly released its report, Archer announced that its eVTOL was hitting key milestones in the development and was on track to begin "for credit" piloted testing in early 2024. The company shared that the FAA had recently begun approving certification plans for the Midnight eVTOL and issued the first aircraft a Special Airworthiness Certificate to allow it to begin flight test operations.
"With each passing quarter and each milestone hit on schedule, we continue to prove our steadfast strategy and execute on our goal of achieving the most efficient path to market - optimizing our aircraft for certification, manufacturing, and commercial operation," Archer COO Tom Muniz shared in the announcement.
At the same time, the Grizzly report alleged that the company was repeatedly uploading videos of early flights to support the idea that testing was progressing.
"We believe management continues to promote its misleading story in social media because it can't stop baiting investors with images of achieving FAA's imprimatur well ahead of competition," the Grizzly report said. "All of this is a lie. Ominous clues abound that ACHR's actual flight path ahead is filled with looming storm clouds and a few brick walls."
The highly opinionated report outlined several allegations and beliefs about the misrepresentations and actual progress made by Archer, citing multiple announcements the company had made and earnings reports. Despite the allegations, Investor Place reports that Archer stock is up more than 150 percent this year.
"We believe the claims are without merit and we intend to defend ourselves vigorously," Archer said to Investor Place in response to the complaint.
Investors have until Nov. 20 to ask the Court to be appointed as a lead plaintiff. Those wishing to be a member of the suit may retain counsel or remain an absent member.