Virgin Galactic SPCE shares drop after delaying next spaceflight test
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Virgin Galactic’s spaceship Unity prepares for flight.
Virgin Galactic shares fell after the company postponed its next space test scheduled for this weekend on Friday.
“We have pushed ahead with our pre-flight preparations and during this process decided to allow more time for technical reviews. We are working to determine the next flight opportunity,” the company said in a statement.
Virgin Galactic’s shares are up more than 450% since the company’s IPO in October 2019. The market valuation is now nearly $ 14 billion – despite the company’s lack of significant revenue and steady quarterly losses. Investor speculative trading to date relies on Virgin Galactic making progress in completing its development program and commencing commercial flights. Updates and delays have a significant impact on the daily fluctuations in the stock.
On Friday, shares fell more than 11% in trading from the previous close of $ 59.41.
The stock was up 13% the day before after a notice from the FAA indicated that the spaceflight test should start as early as Saturday. The company confirmed on Thursday that it had “made good progress with our flight preparations,” but stated at the time that the flight attempt was still pending.
A technical review can be done for a variety of reasons, from checking the hardware to checking the software. The delay can therefore range from days to weeks, depending on the severity of the problem.
The upcoming space test is a replica of the December attempt that the company abandoned during launch. Virgin Galactic spent two months analyzing the cause of the demolition and conducting soil tests. The test flight should review “the corrective actions completed”.
While there will only be two pilots on board, the flight is expected to be the first of three in a row as the company plans to complete development of its spacecraft system.
Earlier this week, UBS downgraded the stock to neutral, referring to the stock’s jump earlier in the year. UBS said in a notice to clients that “we are aware of a rating that appears full”, although upcoming test flights form an appealing “catalyst chain”.
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