Space Stocks: Why Rocket Lab (RKLB) Has Its Nose Down After Yesterday’s Launch


Space stocks have been an intriguing group to watch of late. There’s the dramatic moonshot and subsequent fall to earth of prominent space-tourism play Virgin Galactic (NYSE:SPCE). Additionally, Astra Space (NASDAQ:ASTR) is another similar de-SPAC (special purpose acquisition company) that has seen its valuation whipsaw violently.

Person looking through space capsule's cabin window into space.
Source: Shutterstock

However, today, Rocket Lab (NASDAQ:RKLB) is currently down nearly 4% after completing its reverse merger with Vector Acquisition Corp. yesterday. Today’s price action continues yesterday’s decline, bringing the week-to-date decline to double-digit territory.

Why all the negativity?

Well, it appears investors are latching onto some serious negative sentiment around space stocks of late. Despite an announcement Monday that NASA had approved the ESCAPADE mission tied to Rocket Lab, this stock has only continued to freefall.

Let’s dive into what’s behind this sentiment right now.

RKLB Stock Continues Declines on Pessimistic Sentiment for Space Stocks

It appears retail investors and those looking for big wins have looked to other sectors for growth of late. Various popular meme stocks have rallied in recent days, concentrating retail investor interest on a handful of stocks. Accordingly, it appears the love is not being spread out to space stocks as it once was earlier this year.

Various reports comment on investor hesitancy toward the valuations of de-SPAC companies. Given the fact that Rocket Lab is likely a few years away from generating meaningful revenue growth, investors looking for stocks providing generous returns in the here and now are looking elsewhere.

Evidence of froth is also a creeping deterrent to even the most bullish investors today. Stock market valuations have climbed to levels we have never seen before, according to some measures. Therefore, it appears investors are focused on steering clear of specific subsets of hypergrowth stocks. One such grouping appears to be space stocks today.

On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

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