Virgin Galactic shares plunge in heavy trade on uncertainty over space test schedule
The Virgin Galactic spaceship outside of Spaceport America in New Mexico.
Virgin Galactic’s stock fell Tuesday on the back of high trading volume. The company’s next space flight test – and its broader path to launching commercial flights – may be further delayed.
The space tourism company gave an overview of the progress in repeating the space test, which was canceled in-flight in December. While the company says it has now completed repairs to an issue with its VSS Unity spacecraft, an unexpected potential maintenance issue was identified with the VMS Eve carrier aircraft following test flights last week.
Virgin Galactic said the issue in question is scheduled for maintenance in October, but the company is currently analyzing whether maintenance needs to be done now – which would likely further delay the space test schedule. The company planned to rerun the aerospace industry in May but now says the timing “is currently under evaluation”.
“We’ll be back in the market next week with an update on the flight schedule for our next flight,” said Mike Moses, president of space missions and security for Virgin Galactic, during the company’s conference call.
Virgin Galactic’s stock fell as much as 20% in trading from its previous close of trading of $ 17.95 per share before regaining some of the losses to trade around 6%. The stock, which was halted by the NYSE for five minutes due to volatility shortly after opening, exceeded its daily average volume within the first half hour of trading on Tuesday.
The lows of the decline took Virgin Galactic stock below $ 15 per share – its lowest level in nearly a year – and continued to add to the stock losses since hitting a high of over $ 60 per share in February.
Virgin Galactic has four test flights left before development of its SpaceShipTwo system is complete.
Meanwhile, equity losses have accelerated after delays in the first of these four space flights, as well as after sales of shares by Chairman Chamath Palihapitiya, founder Richard Branson and Cathie Wood’s new space ETF. The stock also fell after Jeff Bezos’ company Blue Origin announced plans to launch the first crew flight of its space tourism rocket on July 20. UBS cautioned against removing Virgin Galactic’s first mover advantage.
The start of Virgin Galactic’s commercial service, which is expected to begin in 2020 when the company completed its SPAC merger, has been postponed to early 2022.
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