Virgin Galactic’s spacecraft Unity prepares for flight.
Virgin Galactic
Virgin Galactic shares fell after the company delayed its next spacecraft test, which was scheduled for this weekend, on Friday.
“We have progressed with our pre-flight preparations and during the process we have decided to allow more time for technical investigations. We are identifying the next flight opportunity,” the company said in a statement.
Virgin Galactic’s share has risen more than 450% since the company announced in October 2019, with its market valuation now reaching $ 14 billion – despite the lack of significant revenue so far 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 strong impact on the daily swing of the stock.
On Friday, shares fell 11% in trading on the market, compared to the previous discount of $ 59.41.
The share jumped 13% the previous day, after a notice from the FAA indicated that the space test would already be on track on Saturday. The company confirmed on Thursday that it was ‘making good progress with our flight preparations’, but noted at the time that the flight effort was still pending technical readiness.
A technical investigation can exist for a variety of reasons, from inspecting hardware to verifying software, so the delay can vary from days to weeks, depending on the severity of the problem.
The upcoming spacecraft test is a repeat of the December effort that ended the company during launch. Virgin Galactic studied the cause of the abortion for two months and performed soil tests, with the test flight to check ‘the repairs 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 wants to end the development of its spacecraft system.
Earlier this week, UBS lowered its rating on the stock to neutral, citing the stock’s jump to start the year. UBS said in a comment to customers that ‘we are mindful of valuation that looks complete’, although upcoming test flights create an attractive ‘catalyst chain’.
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