Shares of German flying electric-car manufacturer Lilium N.V. (LILM -3.17%) took off in a blaze of glory this morning, shooting 15.4% higher (through 10 a.m. ET) after announcing that Floridian air-taxi company UbranLink will buy 20 of its all-electric vertical take-off and landing (eVTOL) Lilium Jets and take out an option to buy 20 more. The announcement comes just days after Lilium filed notice with the SEC that one of its shareholders is planning to sell 75 million shares of Lilium stock.
These two announcements are probably not unrelated.
Lilium scores a sale
Let's back up a step and start off today with Friday's news. On May 3, Lilium made two filings with the SEC. First, it advised that private equity company YA II PN, Ltd (Yorkville) has entered into a Standby Equity Purchase Agreement. In exchange for Lilium paying Yorkville 1 million shares and $25,000, Lilium has the right to require Yorkville to buy up to $150 million worth of its stock at current market prices.
Simultaneously, Lilium notified that Yorkville plans to sell 75 million shares of Lilium stock "from time to time."
Now, three days later, Lilium announced it has an order for up to 40 of its eVTOL flying cars. This news helped to raise its stock price by 15%, guaranteeing that Lilium will get more money for the shares it sells to Yorktown and increasing the value of the 1 million shares it paid to Yorktown up front. That hardly seems like a coincidence.
Is Lilium stock a buy?
Lilium investors are understandably excited at the prospect their company will finally have some revenue. But before you get too irrationally exuberant, take a moment to notice that no sales price was disclosed for these Lilium Jets. At this time, there's no way to know how big of a revenue boost this will be for Lilium or even if the sale will be profitable.
Until we know more, you can't really say this deal makes Lilium stock a buy.
