Five years ago, Wisk Aero sued Archer Aviation Inc. (NYSE:ACHR) for allegedly stealing its trade secrets. On August 10, Archer agreed to buy Wisk entirely, along with two other The Boeing Company (NYSE:BA) subsidiaries, in a deal that gives the aerospace giant a roughly 20% interest in the electric-aircraft company it previously accused of corporate theft. Archer’s stock jumped by about 20% following the announcement.
The Companies’ History
Wisk sued Archer back in 2021, alleging that the younger company stole its autonomous-flight trade secrets and breached on its patents. The two reached an agreement in August 2023, with a unique twist: The Boeing Company (NYSE:BA) invested in Archer Aviation Inc. (NYSE:ACHR), and the companies formed an autonomous-flight relationship, with Wisk serving as Archer’s exclusive autonomy provider for subsequent aircraft.
That collaboration has now turned into a complete acquisition. Under the definitive agreement, Archer Aviation Inc. (NYSE:ACHR) will buy Wisk Aero, SkyGrid, a digital airspace and air-traffic-management software firm, and Insitu, a drone producer, in an all-stock transaction.
The Terms of the Agreement
The Boeing Company (NYSE:BA) will acquire freshly issued ACHR Class A shares equal to 19.75% of Archer’s outstanding shares immediately before to closing, leaving Boeing with about 16.5% in stakes once the transaction closes, making it Archer’s largest outside stakeholder. The Boeing Company (NYSE:BA) has also agreed to spend up to $55 million in an upcoming Archer investment round, and will obtain warrants to buy up to $200 million additional Archer stock in the future. In exchange, the companies have signed a cross-licensing agreement that allows Boeing to continue using Wisk’s fundamental autonomous flight systems for its own commercial and defense programs, a detail experts have linked to Boeing’s ultimate successor to the 737.
Why Archer Wants It
For Archer Aviation Inc. (NYSE:ACHR), the deal is less about eliminating a competitor than about expanding. The acquisition includes a defense firm with an annual revenue of more than $200 million across 35 nations, as well as Wisk’s six generations of eVTOL aircraft designs and over 1,700 completed test flights. Archer describes the combined operation as a “end-to-end physical AI platform for aerospace and defense.”
Why Boeing Is Selling
The transaction continues a divestiture pattern established by CEO Kelly Ortberg, who came office in August 2024 with a directive to reduce Boeing’s sprawling portfolio. Last year, the company sold Jeppesen, a flight planning service, and related digital aviation units to private equity firm Thoma Bravo for $10.55 billion. Offloading Wisk, SkyGrid, and Insitu allows The Boeing Company (NYSE:BA) to shift its focus away from non-core businesses.
Smart Money Sentiment
Boeing’s institutional hedge fund ownership fell from 114 in the fourth quarter to 99 in the first quarter. However, short interest is tightly anchored at 1.96% of the float, underscoring Wall Street’s confidence in Boeing’s defense backorders and commercial turnaround under Ortberg. At the same time, hedge fund backing decreased for Archer as well, from 48 fund holders in Q4 to 35 in Q1. Compounding this decrease, Archer carries a 14.14% short interest, indicating continued market pessimism over eVTOL certification timetables, cash burn rates, and commercial uptake.
Insider Monkey’s Verdict
The acquisition greatly enhances Archer’s financial profile by adding $200 million or more in immediate, profitable defense revenue from Insitu. Despite a 14.14% short interest, Boeing’s presence as a key shareholder and technology partner offers growth investors a strong value support.
Meanwhile, The Boeing Company (NYSE:BA) stands with the best possible capital allocation outcome. Ortberg continues to de-risk the company’s balance sheet by offloading early-stage cash burn while keeping essential autonomous cross-licenses for next-gen commercial narrowbodies and preserving a significant equity interest in Archer Aviation Inc. (NYSE:ACHR). In that way, BA is an appealing long-term aerospace investment as its core manufacturing operations stabilize.
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