Virgin Galactic erases 20% loss and turns positive in wild session
The Virgin Galactic spaceship outside of Spaceport America in New Mexico.
Virgin Galactic shares plunged and rebounded Tuesday amid high trading volumes. 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 after test flights last week.
Virgin Galactic said the issue 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 spaceflight 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 impact of the flight schedule on our next flight,” said Mike Moses, president of space missions and security for Virgin Galactic, during the company’s conference call.
Virgin Galactic stock fell as much as 20% to start trading before recovering all of its loss to end the day barely positive, closing 1% at $ 18.12 per share. The stock, which was halted by the New York Stock Exchange 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 brought Virgin Galactic stock below $ 15 a share – its lowest level in nearly a year – and temporarily added to the stock losses since it peaked above $ 60 a 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 exchange-traded space fund. The stock also fell after Jeff Bezos’ company Blue Origin announced plans to launch the first manned 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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