Despite recording constant gains over the last twelve months, SPCE has dropped over 20% in the last five days.
American spaceflight company Virgin Galactic Holdings Inc (NYSE: SPCE) recorded losses in its stock after the company aborted its spaceflight test on the 12th of December. According to the space tourism company, the spaceflight test was cut short as a result of a problem with the engine ignition. The failed test was supposed to be the company’s one of three flight tests before completing its spacecraft system.
Virgin Galactic Failed Spaceflight Test
According to a CNBC report published on the 14th of December, Virgin Galactic stock dropped 17.4% after the failed spaceflight test. SPCE closed at $26.47, marking its third-worst trading day ever. The company’s CEO Michael Colglazier explained the reason for the unsuccessful test. In a statement, he said:
“The flight did not reach space as we had been planning. After being released from its mothership, the spaceship’s onboard computer that monitors the rocket motor lost connection. As designed, this triggered a fail-safe scenario that intentionally halted ignition of the rocket motor.”
The CEO added that the pilot flew back to Spaceport America after the unexpected issue that sprang up during the test. Virgin Galactic has plans to re-attempt the spaceflight test from Spaceport America in New Mexico.
Despite that the Virgin Galactic stock fell due to the failed spaceflight test, investment banking company Credit Suisse’s price target on the space tourism company remains at $26. In a note, Credit Suisse analyst Robert Spingarn pointed out that Virgin Galactic has proven a safe flight with its built in fail-safe scenario that enabled a safety back to earth. Virgin Atlantic’s CEO had earlier said that the pilots landed safely at Spaceport America.
Also, Morgan Stanley rates Virgin Galactic stock overweight with a $24 price target.
After Virgin Galactic stock fell due to the aborted test, the company dropped further on the 15th of December. At midday, SPCE had dropped 5.9%. The losses showed that investors were looking forward to a successful test.
As of the 16th of December, Virgin Galactic Stock gained 6.8%, relief after recording losses. Specifically, a report by The Motley Fool revealed that the company’s stock rose at 11 am EST.
SPCE Fell Further as Stakeholders File to Offer 113 Million Shares
On the 18th of December, Virgin Galactic fell another 4% in premarket trading. The loss occurred after shareholders filed to sell about 114 million of stock. Still at premarket trading, the company is down 9.33% to $23.24 over its previous close of $25.50. The filing with the US Securities and Exchange Commission (SEC) stated:
“This prospectus relates to the resale of up to 112,964,840 shares of our common stock by the selling stakeholders named in this prospectus or their permitted transferees, which includes up to 104,964,840 outstanding shares of our common stock and up to 8,000 shares of our common stock that are issuable upon the exercise of warrants to purchase our common stock that were initially issued in connection with a private placement.”
Despite recording constant gains over the last twelve months, SPCE has dropped 20.41% in the last five days.
Ibukun is a crypto/finance writer interested in passing relevant information, using non-complex words to reach all kinds of audience. Apart from writing, she likes to see movies, cook, and explore restaurants in the city of Lagos, where she resides.
