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Virgin Galactic shares dropped after the company on Friday delayed its next 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 said in a statement.
Virgin Galactic’s stock has soared more than 450% since the company went public in October 2019, with its market valuation now reaching near $14 billion — despite the company’s lack of significant revenue to date and steady quarterly losses. Investors’ speculative trading to date is contingent upon Virgin Galactic making progress in completing its development program and beginning commercial flights, with updates and delays having a pronounced effect on the stock’s daily swings.
On Friday shares fell as much as 10% in premarket trading from its previous close of $59.41.
The stock had jumped 13% the day before, after a notice from the FAA indicated the spaceflight test was on track to launch as early as Saturday. The company had confirmed on Thursday that it was “making good progress through our flight preparations,” but noted at the time that the flight attempt was still pending technical readiness.
A technical check may be for a wide variety of reasons, from inspecting hardware to verifying software, so the delay could range anywhere from days to weeks depending on the severity of the issue.
The upcoming spaceflight test is a redo of the December attempt the company aborted mid-launch. Virgin Galactic spent two months analyzing the cause of the abort and carrying out ground testing, with the test flight set to check “the remedial work that has been completed.”
While only two pilots will be on board, the flight is expected to be the first of three in a series as the company seeks to finish development of its spacecraft system.
Earlier this week UBS lowered its rating on the stock to neutral, citing the stock’s jump to begin the year. UBS said in a note to clients that “we’re mindful of valuation that appears full,” even though upcoming test flights create an appealing “catalyst chain.”
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