Why Virgin Galactic Stock just fell 6.5%
Virgin suffered a slight setback over the weekend when a test flight scheduled for Saturday was abruptly interrupted after a communication problem prevented the engine of his VSS Unity spaceplane from turning on. Although the space mission did not go as planned, Unity was able to return safely to Spaceport America and land. The two pilots returned home safe and sound. Nevertheless, the test flight failed triggered a liquidation of Virgin Galactic shares, and that continued today, with shares of Virgin Galactic falling 5.9% as of 12:15 p.m. EST.
At the last report, Virgin Galactic stock was down about 22% from Friday’s stock, just before the test flight attempt. This tells you how much investors were relying on everything going 100% on Saturday – around 22% of market cap.
But if you ask me, I’m not sure that the interruption of the test flight was really that big of a deal. Remember that this was just a series of Three Planned test flights that Virgin intends to perform over the next one to four months, leading to the hoped-for launch of commercial space tourism in the first quarter of 2021 or later. Failure of just one of those three test flights to go as planned might not delay the eventual commercial launch date at all as much, given the time remaining until the official commercial launch date.
Additionally, if you consider how pandemic-related travel restrictions could prevent potential Virgin customers from even reaching New Mexico to board their flights, it’s entirely possible that business operations may be. After in four months.
In short, it is important to complete the test flight schedule and this is a sine qua non for the commencement of commercial operations of Virgin Galactic. However, I am not convinced that the completion of all the scheduled test flights is the most An important “milestone” that must be reached before Virgin Galactic begins operating commercial flights on a regular basis – and generating sustainable income and profits. Consolidation loans for fast money.
Just like in the “ordinary” airline industry, that won’t happen until the pandemic is over and travel restrictions are lifted. And if I’m right about that, then having your test flight schedule delayed by days, or even weeks, just isn’t that big of a deal to Virgin Galactic. long term outlook as a stock.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are motley! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.