Virgin Galactic’s Unity spacecraft prepares for flight.
Virgin Galactic
Shares of Virgin Galactic fell after the company postponed its next space flight test scheduled for this weekend on Friday.
“We have made progress with our pre-flight preparations and during that process we have decided to spend more time on technical checks. We are working to identify the next flight option,” the company said in a statement.
Shares of Virgin Galactic are up more than 450% since the company went public in October 2019, with a market valuation close to $ 14 billion – despite the company’s lack of significant income to date and steady quarterly losses. Investors’ speculative trading so far depends on Virgin Galactic making progress in completing its development program and launching commercial flights, with updates and delays having a pronounced effect on the stock’s daily fluctuations.
On Friday, shares in premarket trading fell a whopping 11% from the previous close of $ 59.41.
The stock had risen 13% the day before, after a message from the FAA indicated that the space flight test would be launched as early as Saturday. The company had confirmed on Thursday that it was “making good progress with our flight preparations,” but noted at the time that the flight attempt was still pending technical readiness.
A technical check can be for a variety of reasons from hardware inspection to software verification, so the delay can range from days to weeks depending on the severity of the problem.
The upcoming space flight test is a repeat of the December attempt that the company aborted mid-launch. Virgin Galactic spent two months analyzing the cause of the abortion and conducting ground tests, with the test flight set to check “the restoration work that has been completed.”
While there will be only two pilots on board, the flight is expected to be the first of three in a series as the company aims to complete development of its spacecraft system.
Earlier this week, UBS downgraded its rating on the stock to neutral, citing the stock’s jump at the start of the year. UBS said in a note to customers that “we are aware of the valuation that seems full,” even as upcoming test flights create an attractive “catalyst chain.”
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