SpaceShipTwo “Unity” on the runway after an abandoned space test on December 12, 2020.
Virgin Galactic shares fell in trading Monday after the space tourism company canceled its final space flight test mid-launch on Saturday because of an engine ignition problem.
“The flight did not reach space as planned. After being released from its mothership, the spacecraft’s on-board computer monitoring the rocket motor lost connection. As planned, this triggered a fail-safe scenario that deliberately stopped the rocket motor from igniting.” Incident, our pilots flew back to Spaceport America and landed gracefully as usual, “said Michael Colglazier, CEO of Virgin Galactic, in a statement.
The company expects to repeat the space flight attempt from its operational base at Spaceport America in New Mexico. Colglazier said Virgin Galactic is evaluating the data from the test and not saying when it is expected to be ready to go again. The company said it had several rocket engines “ready” on site and would “check the vehicle and get back on flight” soon. “
Virgin Galactic’s shares fell 17.4% in trading to trade at $ 26.47. The drop was the third worst trading day since Virgin Galactic stock debuted in October 2019.
“Although the test flight this weekend wasn’t a success, that’s the silver lining [Virgin Galactic] was able to prove that the built-in fail-safe scenarios worked properly [SpaceShipTwo] slide safely back to earth without endangering the safety of people on board. Successfully triggering a resilient scenario should help allay some investor concerns about the risk of a catastrophic event [Virgin Galactic] begins commercial operations, “wrote Credit Suisse analyst Robert Spingarn in a statement to investors on Monday.
Credit Suisse has an outperform rating for the share with a price target of USD 26.
Saturday’s flight was the first of three remaining space tests the company plans to conduct to complete development of its spacecraft system. The third will wear founder Sir Richard Branson. The impact of the canceled test on Virgin Galactic’s flight schedule remains to be determined. The Branson flight was previously scheduled for the first quarter of 2021.
“A lot of the investors we’ve spoken to just want to see a number of successful test flights and don’t seem to care too much about the exact timing of Branson’s launch,” Adam Jonas, an analyst at Morgan Stanley, wrote in a note. “The underlying representation and opportunity presented by the stock is unchanged in our opinion.”
Morgan Stanley has an overweight position in the stock with a price target of $ 24.
Additionally, Virgin Galactic’s Saturday spaceflight attempt was the company’s first in nearly 22 months, with its previous spaceflight in February 2019 from the Mojave Air and Spaceport in California. In the meantime, the company has moved from its manufacturing and development facilities in Mojave to Spaceport America.
– CNBC’s Michael Bloom contributed to this report.
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