Joby Aviation Inc. (JOBY) shares took a dive in Wednesday's after-hours session after the electric air taxi maker announced plans to raise $1 billion through a combination of debt and equity.

The Details Behind the Capital Raise

Joby said it intends to offer convertible senior notes due 2032 alongside shares of common stock, with the combined offerings expected to generate approximately $1 billion in proceeds. The company is also giving underwriters a 30-day option to purchase additional common stock and notes, which is pretty standard for these types of deals.

There's an interesting wrinkle here: Morgan Stanley plans to conduct a separate delta offering of Joby shares. The number of shares in that offering will be determined when the deal prices, but here's the key detail: no new shares will be issued for the delta offering, and Joby won't receive any proceeds from it.

Where the Money Goes

Joby plans to use some of the proceeds from the note offering to fund capped call transactions, which is a common hedging strategy for convertible debt. The remaining proceeds from the notes, combined with money raised from the common stock offering, will go toward the company's certification and manufacturing efforts as it prepares for commercial operations.

For context, Joby had approximately $978.1 million in cash, cash equivalents and investments in marketable securities as of September 30, 2025. The company is scheduled to report earnings again next month, which should provide more clarity on its cash burn rate and operational progress.

Market Reaction

Investors clearly weren't thrilled about the dilution. Joby shares were down 11.43% in after-hours trading, falling to $11.85 at the time of publication on Wednesday.

The negative reaction makes sense. Capital raises like this are necessary for growth-stage companies, especially ones building electric aircraft, but they dilute existing shareholders. It's the classic tension in high-growth, pre-revenue companies: they need money to reach commercialization, but raising that money means giving up a piece of the pie.