Archer Aviation (NYSE:ACHR) is under increased scrutiny following a report by short-seller Culper Research, which accuses the electric vertical takeoff and landing (eVTOL) aircraft developer of exaggerating its technological progress and misleading investors regarding its Midnight aircraft.

Culper Research, which disclosed a short position in Archer, alleges that the company has repeatedly overstated the development and testing milestones of its Midnight eVTOL over the past year. One of the key discrepancies involves Archer’s February 27, 2025, statement that the Midnight aircraft was fully assembled and in final ground testing. Internal communications obtained by Culper, including emails with the Salinas Fire Department (SFD), reportedly show that the aircraft had not even arrived at the site until March, with high-speed testing still incomplete by late April.

Further undermining Archer’s narrative, the SFD reportedly shared photos from an April 10 visit to Archer’s hangar, showing the Midnight in a disassembled state. This contradicts the company’s Q1 2025 earnings call, where it claimed piloted flights were imminent. Culper asserts that only a single low-speed ground test had occurred around that time.

Culper also questioned CEO Adam Goldstein’s public relations efforts. According to the report, Archer paid millions of dollars for an appearance by Goldstein on The Tonight Show Starring Jimmy Fallon, as well as for Fallon’s participation in a promotional event, despite the company framing it as a media invite following Archer’s sponsorship of the 2028 Summer Olympics.

The firm further alleges that Archer misled stakeholders about its Olympic sponsorship by suggesting it reflected FAA confidence in its technology. In reality, Culper claims Archer paid between $25 and $30 million for the sponsorship rights – a move it suggests prioritizes marketing over aviation milestones.

Concerns were also raised about Archer’s June 2024 announcement of a successful full-transition flight – a critical technical milestone. Culper notes that no video or credible evidence of such a flight has been presented, particularly with FAA-required aft propellers in their faired configuration.

Adding to the skepticism, Culper says design changes revealed in Archer’s Q1 2025 results conflict with previous claims that the Midnight’s design was finalized. The aircraft shown differed significantly from earlier models, indicating more than just minor updates to instrumentation or landing gear.

Culper’s report also highlighted Archer’s withdrawal from a planned demonstration flight at the 2025 World Expo in Japan, a move that reportedly wasn’t disclosed to investors. The flight was part of a broader deal to sell up to 100 aircraft to a joint venture led by Japan Airlines.

Perhaps most significantly, Archer’s own recent 10-K filing, submitted in February 2025, included a new warning: the company may never obtain FAA certification for its aircraft – a crucial step for commercial viability.

To emphasize its doubts, Culper issued a public challenge to Jimmy Fallon: take part in an FAA-compliant commercial flight on an Archer Midnight by July 30, 2028. If the flight occurs, Culper pledges to donate the amount of its short bet to four New York and Los Angeles-based charities. If it doesn’t, the wager serves as a symbolic indictment of Archer’s progress.

As of premarket trading, Archer shares were down 1.9%, reflecting investor unease following the release of the report.

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