Archer Aviation (NYSE: ACHR) is falling fast in Monday’s trading. The flying-taxi specialist’s share price was down 26.2% as of 12:15 p.m. ET.

Archer Aviation is sinking today in conjunction with surging short interest on the stock. On the heels of explosive gains over the last month, some investors are now placing big bets that the company’s share price will go down in the near term.

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Even with today’s big sell-off, Archer Aviation stock is still up roughly 115% over the last month. Bullish momentum for the stock was supercharged following analyst coverage from Needham published on Nov. 19. The firm’s analysts outlined a bullish position on the flying-taxi space and related regulatory developments, and it stated that Archer’s large order book put the company in good position to capitalize if and when the industry takes off.

On the other hand, the recent rally for the stock was not powered by fundamental developments for the business. With shares soaring thanks to meme stock momentum and fear of missing out (FOMO) dynamics, some investors moved to bet that the flying-taxi company’s valuation would decline in the near term.

This action halted and reversed bullish momentum for the stock, and some investors likely saw the pullback as a sign that it may be time to take profits. In turn, the added selling pressure is pushing the company’s share price lower.

With the business still in a pre-revenue state, Archer Aviation is a difficult company to value. It says that it has roughly $6 billion in orders for its Midnight vehicles, but it still needs to receive regulatory approvals in key markets and show that it can commercialize its products at scale. As a result, the stock has often seen huge swings on relatively little news — or even no news at all.

If short sellers continue to place big bets against the stock, it’s possible that Archer could face significant valuation pressures in the near term. On the other hand, rising short interest also opens the door for a potential short squeeze. If the stock begins rocketing higher again, those who shorted it could be forced to buy back the shares they had lent and placed bets against. In turn, that could have the effect of creating new bullish momentum for the stock.

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