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Virgin Galactic’s first commercial spaceflight launched successfully on Thursday, taking a crew from the Italian Air Force and the National Research Council of Italy on a roughly 90-minute trip to the edge of space.
The flight, dubbed Galactic 01, marks the start of commercial service for the space tourism pioneer after a series of delays.
Shares (ticker: SPCE) fell sharply on the news—roughly 8.7% to $4.33—after trading higher earlier in the day. The stock market often “buys the rumor and sells the news.” That’s what happened during the company’s last high-profile launch.
For comparison, the
S&P 500
and
Dow Jones Industrial Average
were both higher in midday trading.
A double-hulled mother ship took the Galactic spacecraft to about 45,000 feet before dropping it. Unity then lit its engine and accelerated to about Mach 3, or three times the speed of sound, traveling about 50 miles above the surface of the Earth. After passengers experienced weightlessness, the ship slid back to Spaceport America in New Mexico.
It was an exciting event and investors were optimistic. A livestream of the flight went live at around 11 a.m. Eastern time.
A shot from Virgin Galactic’s launch. The start-up’s first commercial flight went off without a hitch today.
Virgin Galactic/Twitter
Prior to the flight, early gains put shares up about $1.50, or 45%, over the past month. A similar pattern emerged when Virgin Galactic founder Richard Branson went to the edge of space almost two years ago in July 2021. Virgin Galactic shares rose 40%, from about $35 to $45 a share, the month headed into the flight.
The gains didn’t last though. Shares closed below $35 just three days after the flight. The stock market is forward-looking and good news can be reflected in a stock price ahead of an expected event.
Virgin Galactic stock has declined about 90% since Branson flew. A series of regulatory and equipment-related delays have pushed out the start of commercial service much further than expected. And higher interest rates, which make funding start-up companies more expensive, also have sapped some investor enthusiasm.
In the long run, earnings and cash flow will determine how Virgin Galactic stock trades. In the short run, investors should watch out for a stock dip, even with a successful first flight.
With the start of service, Wall Street projects about $12 million in 2023 revenue. Positive earnings and free cash flow aren’t projected until the end of the decade when annual sales reach roughly $700 million. Analysts also project Virgin Galactic will spend roughly $1 billion between now and the end of the decade before the business becomes self-sustaining.
Write to Emily Dattilo at [email protected] and Al Root at [email protected]
Source: https://www.barrons.com/articles/virgin-galactic-flight-launch-live-stream-today-stock-price-3c4335d0?siteid=yhoof2&yptr=yahoo