Welcome to another story and another video in my One Company One Story series.

This time, Vertical Aerospace (EVTL).

Here comes the amateur legalese.

I began investing in companies and their stocks in the late 70s, but am Not a certified investment professional.

My style and history of investing is described in Dream. Invest. Live., a book I wrote by request – which came out as the Great Recession (the Second Great Depression) began. Don’t underestimate luck. Oops. https://www.amazon.com/-/e/B0035XVXAA

I am Not an investment professional. This is Not financial advice. 

Vertical Aerospace is pioneering electric aviation. That’s what they say on their website. There certainly is a new era in aviation as autonomy, electric power, and variants of quadcopters try to find how they are going to fit into our aerial reality. Vertical Aerospace looks positioned to benefit whichever way the trends go, and other companies are too.

Autonomy is in use, particularly in drone deliveries. The best early passenger test is in the autonomous auto market. They’ve had some traffic issues, and that was only in 2-D. 3-D is more complicated and hazardous because, instead of cars sitting at traffic lights, air vehicles eventually have to land. This will require work.

Electric power is becoming ubiquitous. Range remains limited in aerial operations, but improving battery technology is near. In the meantime, range is expected to be about 100 miles with four passengers; so, operations are expected to be inter-city or city to airport. (Living on an island conjures dreams of ignoring rough waters as the ride makes a few-mile hop. Of course, helicopters can do the same thing, but rarely do so.)

The use of quadcopters for drones and camera platforms means that Vertical Aerospace’s VX4, which has four wing-mounted propellors, is more familiar than it would have been ten years ago even though its props are in a line. It is not a direct comparison, but neither is the other similar vehicle, the V-22. The V-22 has two massive propellors instead. It has been in operation since 1989. Both use props pointed up for vertical takeoff, then tilted for cruise, and augmented by a wing for extra lift.

The VX4, which undoubtedly has variants in preliminary design, or at least rattling around in some engineer’s head, has something most startups dream of: significant pre-sales. According to their website, they have orders for 1,500 aircraft for a value of $6B.

$6B in orders is in contrast to the company’s market cap of ~$160M. Even without a premium, that’s a six-fold return to reach a $1B valuation. Multiply by 6 again to equal the value of those pre-orders, but those pre-orders will probably be delivered over years. And yet, that’s a nice future to work from, especially because success breeds success, and improvements can expand product lines.

Or, innovative vehicles and services can be grounded by conservative bureaucracies. One outlet for the company is the prospect of sales in other countries that may not be as constraining.

Regardless of where the company is going, it’s impressive where they’ve gotten to. Congratulations, all involved.

Certification looks like it is the primary hurdle. That may also be the critical point in the stock price movement. The stock price is less than the price of a lottery ticket. Low price. Big numbers. Classic risk and reward scenario. There’s a big market, but even Boeing and Airbus know that airplane accidents can dramatically impact a stock price. 

There’s a lot for Vertical Aerospace to maneuver around.

I don’t know what’s going to happen; but, I hope they survive and thrive. I’ll be watching.

The video: