Virgin Galactic (SPCE) delayed a test flight of its SpaceShipTwo vehicle, a key step needed before commercial flights can start. SPCE stock sank.
The test window was supposed to open this Saturday. But on Friday, the space tourism company said it decided to allow more time for technical checks and is working to identify the next flight opportunity.
The test comes after Virgin Galactic aborted a powered flight on Dec. 12, when it failed to hit important milestones due to a sudden halt in the rocket motor’s ignition sequence. Management has said that the next powered flight will test the work that has been done since the aborted flight.
The test will also include the original objectives from the December flight, which was supposed to complete data-gathering for the final two FAA verification and validation milestones.
Those milestones are needed before SpaceShipTwo can be cleared for commercial flights.
In addition, the customer cabin as well as upgraded horizontal stabilizers and flight controls will be evaluated.
Virgin Galactic shares dived 9.2% to 53.93 on the stock market today. SPCE stock was among heavily shorted stocks that saw interest from retail investors in January and has more than doubled since the start of the year.
Wall Street has been extremely bullish on the company despite it not having started commercial service or earned any revenue. The majority of analysts still have a buy rating on SPCE stock, but some are getting skittish.
UBS downgraded Virgin Galactic stock to neutral from buy on Wednesday on a “mindful” approach to valuation. Analyst Myles Walton wrote that he thinks a successful test flight by Virgin Galactic is already priced into its share price. UBS now has a price target of 52 on the stock.