Look for the shares of Virgin Galactic (NYSE:SPCE) to come back to earth today, after the launch of the commercial space travel operator’s first test flight this weekend failed to get into suborbital space.
SPCE stock, which had soared almost 250% in the last 12 months, was down by more than 17% in pre-market trading on Monday morning.
While the vehicle did return to earth safely, this test flight was a huge milestone that was required before Virgin Galactic could actually launch its space tourism business.
Virgin is one of several operators seeking fortune in commercial space travel, as Richard Branson joins his fellow billionaires Tesla (NASDAQ:TSLA) founder Elon Musk and Amazon (NASDAQ:AMZN) founder Jeff Bezos in the space race. Musk and Bezos are the driving forces behind their respective rocket operators SpaceX and Blue Origin.
As Launch Sputters, Will SPCE Stock Shudder?
Importantly, Virgin aborted its third try to reach the edge of space on Dec. 12 after the engine of its space plane ignited and then sputtered out. The vehicle then safely glided back to the runway at Spaceport America, the company’s new desert base in New Mexico. The pilots were reported to be safe and sound.
In a statement, Virgin Galactic CEO Michael Colglazier said: “Our flight landed beautifully, with pilots, planes, and spaceship safe, secure, and in excellent shape — the foundation of every successful mission!”
“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. Following this occurrence, our pilots flew back to Spaceport America and landed gracefully as usual.”
The company said it was conducting post-flight analysis and reported that the onboard computer which monitors the propulsion system lost connection, triggering a fail-safe scenario that intentionally halted ignition of the rocket motor.
$250,000 Per Ride
Nevertheless, despite anticipation for the weekend flight, the shares on Dec. 11 closed down 0.44% on slightly higher-than-average volume.
The flight was the first of two, with the next one slated to carry four mission specialists plus pilots. A third test is to carry Virgin Group founder Branson into suborbital space.
If all goes well, Virgin Galactic could soon be launching its $250,000-per-ride space tourism business, and could officially ramp up science partnerships like that with NASA. Since coming public, investors have traded SPCE stock on what it represents. That perception may have met reality on Saturday.
Now, it is time for the company to prove that its business works, and that it can safely take tourists into space.
On the date of publication, Robert Lakin did not have (either directly or indirectly) any positions in the securities mentioned in this article.
InvestorPlace contributor Robert Lakin is a veteran financial writer and editor, following fintech, agtech and property tech startups.