Virgin Galactic stock tumbles
Shares sink after company pushes back next spaceflight
Virgin Galactic Holdings Inc. sank after saying its next test flight to space won’t occur until May, three months after the previous plan and further delaying the company’s space tourism trips.
The new schedule also pushed back Virgin Galactic’s plan to carry billionaire founder Sir Richard Branson on a separate test that had been set for the first quarter of the year, since his flight would need to follow the May trial. Branson’s trip is likely for this summer and dates for it are being considered, the company said on a conference call Thursday.
Company shares plunged 14% to $36.50 before the start of regular trading Friday, putting the stock on course for its sharpest decline since mid-December. Virgin Galactic had advanced 78% this year through Thursday as anticipation built for its commercial debut. Shares closed at $37.24.
The delays underscore the challenges for Virgin Galactic as it seeks to get its space trips up and running. The company plans to resume sales after Branson’s flight.
President Mike Moses said electromagnetic interference issues caused a computer problem in December, when the rocket’s engine failed to ignite during a test flight. Virgin Galactic replaced flight-system computers but then uncovered additional EMI issues as it prepared for a Feb. 13 flight. Those problems will take until May to correct.
“Investors looking for a shorter runway for profitability or even commercialization of their space tourism business have been disappointed,” said Andrew Chanin, co-founder and chief executive officer of ProcureAM, which runs a space ETF that holds Virgin Galactic shares.
The report “is another good lesson and example that space is a tricky business,” Chanin said in an email.