Virgin Galactic shares drop as company delays upcoming spaceflight test

Virgin Galactic’s spacecraft Unity prepares for flight.

Virgin Galactic

Virgin Galactic shares dropped after the company on Friday delayed its subsequent spaceflight test, which was scheduled for this weekend.

“We have been progressing through our pre-flight preparations and, during that process, we have decided to allow more time for technical checks. We are working to identify the next flight opportunity,” the company stated in an announcement. 

Virgin Galactic’s inventory has soared greater than 450% because the company went public in October 2019, with its market valuation now reaching close to $14 billion — regardless of the company’s lack of serious income up to now and regular quarterly losses. Investors’ speculative buying and selling up to now is contingent upon Virgin Galactic making progress in finishing its growth program and starting industrial flights, with updates and delays having a pronounced impact on the inventory’s day by day swings.

On Friday shares fell as a lot as 11% in premarket buying and selling from its earlier shut of $59.41.

The inventory had jumped 13% the day earlier than, after a discover from the FAA indicated the spaceflight test was on observe to launch as early as Saturday. The company had confirmed on Thursday that it was “making good progress through our flight preparations,” however famous on the time that the flight try was nonetheless pending technical readiness.

A technical examine could also be for all kinds of causes, from inspecting {hardware} to verifying software program, so the delay may vary anyplace from days to weeks relying on the severity of the problem.

The upcoming spaceflight test is a redo of the December try the company aborted mid-launch. Virgin Galactic spent two months analyzing the reason for the abort and finishing up floor testing, with the test flight set to examine “the remedial work that has been completed.”

While solely two pilots will likely be on board, the flight is anticipated to be the primary of three in a sequence as the company seeks to complete growth of its spacecraft system.

Earlier this week UBS lowered its ranking on the inventory to impartial, citing the inventory’s leap to start the yr. UBS stated in a notice to shoppers that “we’re mindful of valuation that appears full,” although upcoming test flights create an interesting “catalyst chain.”

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