Vertical Aerospace's Commercial Wins Mask Deep Financial Peril

What happened

In February 2026, Vertical Aerospace announced commercial wins that might signal progress in its eVTOL ambitions, yet its stock price hit lows, highlighting a stark investor disconnect. The company remains pre-revenue with a £781m net loss in 2024, negative equity of £499m, and a going-concern warning in its filings. Management projects a need for ~$700m in additional funding to reach 2028 certification, with risks of covenant breaches by late 2025 without new capital. Mudrick Capital's control and complex derivative financing further skew outcomes toward heavy dilution or equity impairment in adverse scenarios. Thus, while surface-level news appears positive, the underlying financial instability and execution risks render the equity a speculative, long-dated option on uncertain milestones.

Implication

First, the commercial wins do not generate immediate revenue or alter the pre-revenue status, leaving Vertical dependent on external funding to survive its ~£90-100m annual cash burn. Second, with ~$700m needed by 2028 and potential covenant breaches ahead, equity faces severe dilution or a distressed recap that could wipe out common shareholders. Third, certification delays are common in the eVTOL industry, and peers like Joby and Archer are closer to commercialization, increasing competitive pressure. Fourth, Mudrick Capital's control via debt and equity prioritizes creditor recovery, reducing downside protection for public investors. Fifth, until a multi-year funding package is secured and certification milestones are audited, the stock remains a high-risk binary bet unsuitable for most portfolios.

Thesis delta

The February 2026 commercial wins do not shift the Strong Sell thesis; Vertical's equity is still structurally unattractive due to negative equity, high funding needs, and binary execution risk. The stock price lows reflect persistent market skepticism beyond superficial progress, reinforcing that equity value hinges on uncertain future financing and regulatory approval. A thesis change would require evidence of a large, secured capital raise and clear certification advancements, not just incremental commercial announcements.