Investing.com -- Shares of Archer Aviation (NYSE: ACHR ) tumbled 3.2% as the market reacted to a scathing report by short seller Culper Research, accusing the company of misleading investors about the progress and testing of its electric vertical takeoff and landing (eVTOL) aircraft, Midnight.

The report, which surfaced today, alleges that Archer Aviation has been deceptive about the aircraft’s development milestones and its readiness for commercialization. Culper Research claims that internal communications and observations contradict the company’s public statements regarding the assembly and testing of Midnight. Specifically, the report highlights discrepancies in the timeline of ground tests, the physical condition of the aircraft, and the authenticity of purported milestones, such as a transition flight that did not meet FAA airworthiness criteria.

Moreover, the short seller criticizes the company’s promotional activities, including a paid appearance on Jimmy Fallon’s Tonight Show and a costly sponsorship deal with the 2028 Olympics, suggesting these were attempts to bolster the company’s image rather than its technology. The report also raises concerns about significant design changes to Midnight that have not been clearly communicated to investors, potentially indicating unresolved stability issues and design flaws.

Culper’s findings suggest that Archer Aviation’s progress towards FAA certification has stalled, with only a minor increase from 12% to 15% over two quarters. The report casts doubt on the company’s ability to deliver on its promises, including aircraft deliveries to the UAE and a flight demonstration at Japan’s 2025 World Expo.

The market’s negative response reflects growing investor skepticism over Archer Aviation’s claims and its ability to deliver a viable eVTOL aircraft in the near term. The report’s detailed accusations and supporting evidence have clearly raised red flags for shareholders, leading to the stock’s decline in today’s trading session.

As the market digests the implications of these allegations, it remains to be seen how Archer Aviation will address the concerns raised by Culper Research and restore confidence among its investors.

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