Boeing Gets "Wisk-ed" Out of the Flying Car Business, Handing Archer Three Subsidiaries Plus $55M“

“Hey Alexa, play “Danger Zone” by Kenny Loggins” - Archer’s CEO, probably… 

It’s Monday my dudes, and Boeing spent the morning paying a startup to take three of its own companies off its hands. And because very little news makes up good news for anything associated with Boeing, the market went feral over it. 

In short, Kelly Sortberg (read: CEO Kelly Ortberg) has been preaching a leaner, more focused Boeing since 2024, and this is what lean looks like: Wisk Aero, SkyGrid and Insitu walk out the door, and not one dollar walks back in. The entire price came in Archer Aviation stock, 19.75% of the Class A, plus warrants to buy more over four years and a board seat. Then Boeing agreed to put up to $55 million into Archer's next funding round. Sounds legit. 

Naturally, Archer mooned 20% higher by mid-morning, its second 20% day in three weeks. The first was July 20, when Archer unveiled Thunder, an autonomous military aircraft built with Anduril. Meaning, investors have decided Archer is a defense company now, and Archer is not going to talk them out of it. Danger zone.

So what actually changed hands? Insitu builds the ScanEagle, has shipped 3,500 uncrewed aircraft into 35 countries, and does north of $200 million a year in revenue. Archer's revenue last quarter was $1.6 million, every cent of it rent from the Hawthorne airport it owns. Fun fact: Insitu earns Archer's entire quarterly revenue in about three days. Archer also burns roughly $180 million a quarter, so an actual P&L walking through the door is a BFD.

On the flip side of this bigly deal, we have Wisk. 16 years, six generations of aircraft, 1,700 test flights, zero paying passengers. It was born in 2010 as Zee Aero, a Larry Page side quest, got absorbed into Kitty Hawk (a bada$$ stripper name for those interested), rebranded as Cora, and became Wisk once Boeing bought in. Boeing dropped $450 million into it in January 2022 alone. It now belongs to Archer, where it gets folded into Archer's AI platform. Which is named ZEE. Sixteen years, three owners, a billion dollars, and the thing ended up back at its maiden name.

As for Boeing, it keeps access to Wisk's autonomous flight technology through a separate collaboration deal, meaning it sold the company and kept the software (read: we'll take the autonomy, you take the fcking payroll)*. The transaction still needs Hart-Scott-Rodino clearance and should close by year-end. Between the 19.75%, the warrants, the board seat and the $55 million going back in the other direction, think of it less a divestiture and more of a circle jerk with an antitrust filing thrown in the middle. 

That said, regardless of Insitu bringing baggage of its own (read: paying $25 million to settle DOJ claims that it spent eight years billing the Navy and SOCOM new-part prices on no-bid contracts while bolting used sh*t onto the drones), Boeing VP Brian Yutko called it a "win-win" that lets Boeing eat a 16-year science project without ever writing the number down "capitalize on its investments in these technologies over the past two decades through continued development in our core businesses." Those core businesses being commercial airplanes, defense and space, which have lately generated more federal paperwork than free cash flow.

So yeah… that’s everything going down. Adam Goldstein walks away with nearly two million flight hours, a defense business with customers in 35 countries, and a shareholder who can't dump the stock without torching his own position. Sortberg walks away with a lighter org chart, a lottery ticket on the air taxi race, and zero obligation to ever tell anybody what Larry Page's flying car was actually worth. Translation: No cash changed hands. That was the entire point. Place your bets accordingly, friends. Until next time… 

At the time of publishing, Stocks.News does not hold positions in companies mentioned in the article.