Virgin Galactic’s stock price drops following failed spaceflight attempt

“As we do with every test flight, we are evaluating all the data.”

Eric Berger – Dec 14, 2020 2:55 PM | 198

SpaceShipTwo Unity is seen shortly after landing in New Mexico on Saturday. Credit: Virgin Galactic

On Saturday, nearly two full years after its last powered flight, Virgin Galactic attempted to send its sleek SpaceShipTwo space plane on its third suborbital flight above 80km.

However, shortly after the space plane was released from its carrier aircraft, named White Knight Two, the ignition sequence to light the space plane's motor did not complete. As a result, the rocket motor failed to fire, and the two pilots on board safely glided the vehicle back to a runway in New Mexico rather than soaring above the atmosphere.

This flight came almost exactly two years after the company's first successful suborbital flight in December 2018 and 22 months since its second suborbital flight in February 2019. Since then, Virgin Galactic has been moving its operations from California to New Mexico, modifying the interior of SpaceShipTwo's cabin for passenger flights and promising stockholders it would soon begin commercial flights and increase its cadence of operations.

Prior to Saturday's flight attempt, Virgin Galactic's stock had closed at $32.04 per share. When the New York Stock Exchange opened on Monday, the stock dropped about 15 percent, starting the day at $27.11. It was trading slightly higher following the opening.

The company had sought to allay the fears of investors with a news release issued Monday morning, before the stock market opened. It framed the failure as a validation of the spacecraft's safety engineering and said Virgin Galactic would soon return to the skies.

"As we do with every test flight, we are evaluating all the data, including the root cause assessment of the computer communication loss," Michael Colglazier, the chief executive of Virgin Galactic, said in the release. "We look forward to sharing information on our next flight window in the near future.”

Prior to this weekend, the company had set out a fairly rigorous schedule, which would have included another suborbital flight with four mission specialists flying inside the SpaceShipTwo cabin to ensure its readiness for commercial operations. This was to be followed by a final test flight, carrying Virgin Galactic's founder, Richard Branson, during the first quarter of 2021. After this point, the company intended to begin flying commercial missions with paying customers. It is not now clear how this schedule will be affected.

Although the company's slick renderings of the cabin interior show six seats, there are only four seats in the first version of SpaceShipTwo. The vehicle is too heavy, and it lacks the performance to carry six passengers in addition to its two pilots. It is possible that future versions of the spacecraft will be able to handle six passengers, allowing the company to increase its revenue from each flight.

Saturday's flight also must have proven to be a bitter disappointment for Spaceport America and the state of New Mexico where it is based. The state has invested more than $200 million to attract and retain Virgin Galactic and waited nearly a decade for this first powered flight. It will now have to wait a little longer.