Yarbrough Capital has decided that flying cars aren't just science fiction anymore. The investment firm nearly doubled its stake in Archer Aviation (ACHR) last quarter with a whopping 96.8% increase in holdings.
They added 229,545 shares—bringing their total to 466,798 shares worth just over $5 million. That's about 0.09% ownership of a company trying to make electric flying taxis a reality.
I've been tracking eVTOL investments since 2020, and this move strikes me as particularly bold. When most folks are clutching their wallets tight, Yarbrough is essentially shouting, "More flying cars, please!"
The timing is... interesting. Archer just burned through $65.3 million in Q2 alone. That's a lot of cash to incinerate while building vehicles that aren't yet shuttling a single paying passenger through the skies.
But here's the thing about Archer—they've got legitimate progress to show. They've cleared the first phase of FAA certification for their "Midnight" aircraft earlier this year. Not nothing.
They've also locked down partnerships with United Airlines and Stellantis. These aren't exactly fly-by-night operations (sorry for the pun, couldn't resist).
What fascinates me about this investment strategy is the psychology behind it. When you own less than a tenth of a percent of any company, you're not calling shots. You're placing a bet—a relatively small one in the grand scheme of institutional investing—on a specific technological future.
It's the classic asymmetric bet. Downside? Lose $5 million. Upside? Potentially billions if Archer becomes the Boeing of urban air mobility.
The eVTOL space suffers from what I call "perpetual imminence syndrome." These air taxis are always just 2-3 years away from commercial operation... and have been for about a decade now.
Look, the potential market is enormous—some analysts throw around the figure of $1 trillion over the next 20 years. Capture even 1% of that, and suddenly Yarbrough looks prescient rather than reckless.
Archer's stock hasn't exactly been a stellar performer since its SPAC debut. It's bounced around like a ping-pong ball, with the general trajectory pointing south. Yarbrough seems to be following that old Buffett maxim: be greedy when others are fearful.
(Though I'm not entirely sure Uncle Warren was thinking about flying electric taxis when he coined that phrase.)
Transportation revolutions follow predictable patterns—wildly unpredictable on the micro scale but surprisingly consistent from a historical perspective. Remember when everyone thought Segways would transform urban mobility? Yeah, me too.
What strikes me about Yarbrough's position is the patience it implies. They're essentially saying, "We understand this is a decade-long play, not a quarterly earnings game."
Of course, it's easier to be patient with $5 million when it's probably a rounding error in your total portfolio. It's like keeping a lottery ticket in your wallet—one with significantly better odds than Powerball, but still a longshot.
I'll be watching to see if other institutional money follows Yarbrough's lead. Sometimes smart money moves first... and sometimes it just gets burned first.
For now, though, Yarbrough is flying solo in its aggressive Archer bet. Whether they end up looking brilliant or foolish depends entirely on whether those air taxis actually take flight—both literally and financially.
