Virgin Galactic has postponed a test flight because, it says, a third party supplier “flagged a potential manufacturing defect in a component of the flight control actuation system.”
The test, known as Unity 23, was going to take place either late this month or early next, and its postponement is the latest blow to Richard Branson’s company, coming on the heels of the U.S. Federal Aviation Administration’s grounding of its SpaceShip Two as September began.
The FAA action came about because of an incident on July 11, during Virgin Galactic’s fourth test flight. On that day, two pilots, three crew members, and Branson himself passed the FAA’s boundary for what is “space;” and during the ascent, SpaceShip Two veered off course. The deviation was quickly corrected by the pilots, but it qualifies as a “mishap” under FAA rules.
At first, though, that flight seemed to much of the world (including to the investing public) to have been a big success. On Aug. 9, shares of Virgin Galactic (NYSE:SPCE) closed at $35.21.
Thereafter, news of the July mishap leaked and brought the price down to a range between $25 and $27, where it has stayed since.
How the Virgin Galactic News Affected the Stock
In that context, Unity 23, which was to have carried three members of the Italian Air Force, might have been a chance for the company to put that behind it, at least in the eyes of the investing public. But that chance has been delayed. Virgin Galactic said in an announcement late Friday, September 10 that it is now projecting late October for the Unity 23 flight.
On Monday, shares fell below the $25 line that had been serving as a bottom. SPCE closed September 13 at $24.26.
On Tuesday morning, the stock was trading with a $24 to $25 range.
Other Space Stocks Worth Noting
Monday also saw a drop in the prices of other stocks in the space sector, especially those of two much-watched stocks that had only recently gone public with the help of special purpose acquisition companies (SPACs).
Astra (NASDAQ: ASTR), which went public in June, fell 4.85% on September 13, on a general sense that these developments have pushed back yet again the much anticipated arrival of regular commercial space travel.
Rocket Lab (NASDAQ: RKLB) only began public trading in late August also after merging with a blank check company, Vector Acquisition. This SPAC deal valued RKLB at $4.1 billion.
RKLB is the developer of the reusable Electron launch vehicle. It has staked its future on the larger Neutron rocket and its desire for the capital necessary to complete development of the Neutron led to the blank-check deal.
Both of those companies, and many others, have a lot at stake in the continued growth of this market.
The Test Flight is Meant to be a Scientific Mission
The Unity 23 test flight now postponed was conceived as a scientific mission. It was, and still is, intended to “evaluate and measure the effects of the transitional phase from gravity to microgravity on the human body,” according to the Virgin Galactic website.
The three crew members from the Italian Air Force will be:
Col. Walter Villadei, who will “wear a cutting-edge smart-suit … to measure his biometric data and physiological responses,” the website says.
Col. Angelo Landolfi, a physician, who “will conduct tests measuring cognitive performance” and will activate syringe payloads to “investigate how certain liquids and solids mix in microgravity.”
Pantaleone Carlucci, an aerospace engineer and a researcher for the National Research Council. He will “wear sensors that examine heart rate, brain function and other human performance metrics in microgravity.”
Virgin Galactic was founded by Richard Branson in 2004. His British Virgin Group retains an 18% stake through Virgin Investments Ltd.
Investment in commercial space travel, like space travel itself, is not a matter for the faint of heart. The “pot of gold” in the minds of many remains the promise of regular orbital flights for well-heeled tourists.
That, though, is still a long play. Perhaps longer than many of the participants expected.