Investing.com -- Archer Aviation (NYSE: ACHR ) is facing allegations of misleading investors about the progress of its eVTOL aircraft, Midnight, according to a report from Culper Research. The research firm has taken a short position on the company, stating that Archer has consistently provided inaccurate updates about its aircraft’s development and testing milestones over the past year.

On February 27, 2025, Archer announced that the Midnight aircraft was fully assembled and concluding ground tests. However, internal emails between Archer’s flight test team and the City of Salinas Fire Department (SFD) suggest that the aircraft was not in the team’s possession until early March. By April 28, high-speed ground testing had not begun, contradicting Archer’s earlier claims.

On April 10, 2025, SFD visited Archer’s hangar and posted photos showing the Midnight aircraft in a state of disrepair, contradicting the company’s claims of being on track for piloted flights. Despite Archer’s assertion during its Q1 2025 conference call that piloted flights would start within days, investigators found that only a single round of low-speed ground runs had been conducted in the last week.

Archer CEO Adam Goldstein’s claim of being invited to appear on Jimmy Fallon’s Tonight Show following the company’s Olympics sponsorship announcement is also under scrutiny. Culper Research suggests that Archer paid millions for the airtime and for Fallon’s appearance at an Archer promotional event in New York City.

Goldstein also claimed that the company’s sponsorship of the 2028 Olympics indicated FAA confidence in Archer. However, Culper Research believes that Archer paid between $25 to $30 million for the Olympics rights, hinting at a focus on publicity rather than aircraft safety and efficacy.

The report further alleges that Archer staged a fake milestone to unlock additional funding from Stellantis (NYSE: STLA ). Archer announced in June 2024 that the Midnight aircraft had completed a full transition flight. However, the company has not provided any video evidence of the aircraft flying with its aft rotor propellers faired as per FAA regulations.

Archer’s claim that Midnight’s design was mature and needed no modifications is also under question. The company’s Q1 2025 earnings results reveal an entirely different aircraft, indicating that major changes have been made. Archer’s assertions about adjusting flight instrumentation and landing gear are being seen as a cover-up for a complete overhaul.

In November 2024, Archer announced a deal to sell up to 100 aircraft to a joint venture from Japan Airlines and planned a flight demonstration at Japan’s 2025 World Expo. However, Archer has reportedly pulled out of the demo, citing timing issues, information not relayed to investors.

Culper Research has also highlighted Archer’s slow progress in FAA certification. The company’s 10-K filed in February 2025 warned for the first time that Archer may never receive FAA certification at all.

Culper Research has proposed a wager to Jimmy Fallon to complete an FAA-compliant commercial flight on an Archer Midnight by July 30, 2028. If the flight does not take place, Culper Research pledges to donate the wagered amount to four reputable NYC and LA-based charities.

Archer is now down 1.9% in premarket trading.

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