Why Is Virgin Galactic (SPCE) Stock Down Today?

  • Virgin Galactic (SPCE) stock is sinking after its sister company failed a launch mission.
  • Virgin Orbit (VORB) failed to launch nine satellites yesterday due to an “anomaly.”
  • Both companies have had multiple setbacks in the past.
spce stock
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Virgin Galactic (NYSE:SPCE) stock is sinking nearly 2% in early trading today on failed mission news. This decline comes as shares of Virgin Orbit (NASDAQ:VORB) — a sister company to Virgin Galactic — plunge 17% as well. Virgin Orbit failed to launch its satellites yesterday due to an “anomaly,” resulting in the drop.

Virgin Orbit and Virgin Galactic are both partially owned by British billionaire Richard Branson. Here’s what investors should know as VORB and SPCE stock trend down today.

SPCE Stock and the Failed Virgin Orbit Launch

Using a modified jet, Virgin Orbit attempted to launch nine satellites into space yesterday. But due to the malfunction of a rocket carried by the plane, the satellites did not separate correctly and failed to reach orbit. Virgin Orbit’s jet and crew did land safely, however, ending the first space mission ever launched from the United Kingdom.

Richard Branson is a major shareholder of both Virgin Orbit and Virgin Galactic. Both space companies have had significant difficulties in recent years. According to CNBC, this marks Virgin Orbit’s second failure out of six total missions. For its part, Virgin Galactic has had to postpone multiple flights and renovate multiple ships as well.

In a September note to investors, Bernstein analyst Douglas Harned warned that Virgin Galactic’s outlook had worsened while SPCE stock possessed few positive catalysts. Harned dropped shares to an “underperform” rating and placed a $4 price target on SPCE stock.

A Somewhat More Bullish Outlook

That aside, Morgan Stanley did recently resume coverage of SPCE stock, giving shares an “equal weight” rating. Analyst Kristine Liwag wrote that “repeated schedule delays have eroded investor confidence in company execution” but thinks shares should get a boost around the second quarter of 2023. That’s when the company’s commercial business is supposed to kick off.

Like Bernstein, however, Morgan Stanley has a $4 price target on Virgin Galactic.

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On the publication date, Larry Ramer did not hold (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 InvestorPlace.com Publishing Guidelines.

Larry Ramer has conducted research and written articles on U.S. stocks for 15 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been PLUG, XOM and solar stocks. You can reach him on Stocktwits at @larryramer.

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