Why Did Joby Aviation Stock Slide Premarket? $1.2B Capital Raise Spurs Dilution Fears

Joby Aviation (NYSE: JOBY) shares tumbled sharply in premarket trading on Wednesday, January 29, 2026, following the electric air taxi developer’s announcement of a significantly upsized capital raise. The stock fell 9.61% to $12.09 as of 4:41:59 AM EST, down from Tuesday’s close of $13.37.

The decline comes as investors digest news that the company priced concurrent public offerings totaling approximately $1.2 billion, a 20% increase from its previously announced $1 billion target. The substantial capital raise, while positioning Joby to accelerate its certification and manufacturing efforts, appears to have triggered concerns about dilution among existing shareholders.

Inside Joby’s $1.2B Equity and Convertible Notes Offering

Joby Aviation priced its upsized offering with two components: $600 million in 0.75% convertible senior notes due 2032 and 52,863,437 shares of common stock at $11.35 per share. The stock offering price represents a discount of approximately 15% to the previous day’s closing price of $13.37, which helps explain the negative market reaction.

Additionally, Morgan Stanley is offering 5,286,343 borrowed shares to facilitate hedging transactions by note investors through what’s known as a “delta offering.” Both offerings are scheduled to settle on February 2, 2026, subject to customary closing conditions.

The convertible notes carry a 0.75% annual interest rate, payable semi-annually, and will mature on February 15, 2032. The initial conversion price is approximately $14.19 per share, representing a 25% premium over the public offering price.

Joby also entered into capped call transactions with a cap price of $22.70 per share, a 100% premium over the offering price, designed to reduce potential dilution upon conversion of the notes. The company granted underwriters a 30-day option to purchase up to an additional $90 million in notes and up to 7,929,515 additional shares of common stock.

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Funding Expansion: Certification, Manufacturing, and 2027 Targets

Joby estimates net proceeds of approximately $576 million from the common stock offering and $582.9 million from the notes offering, excluding the underwriters’ options. The company plans to allocate approximately $55 million to fund the capped call transactions, with the remainder directed toward certification efforts, manufacturing expansion, commercial operations preparation, and general corporate purposes.

This capital infusion will strengthen Joby’s already robust liquidity position, with the company currently holding more cash than debt and maintaining a current ratio of 13.61.

The fundraising comes as Joby pursues ambitious growth targets, including plans announced in December to double its U.S. manufacturing capacity to four aircraft per month by 2027. The company is utilizing both its main production site in California and a newly acquired 700,000 square foot facility in Dayton, Ohio.

With Toyota Motor Corp. as its largest shareholder since May 2025, Joby is leveraging Japanese manufacturing expertise to scale production. The company has also partnered with Metropolis Technologies to develop 25 vertiports across the United States and continues to target the launch of commercial air taxi operations in 2026, making this capital critical to executing on those timelines.

Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.