Virgin Galactic's spaceship Unity prepares for flight.
Virgin Galactic shares fell 8% on Friday after the company postponed its space test scheduled for this weekend.
"We have pushed ahead with our pre-flight preparations and during this process we decided to allow more time for technical reviews," the space tourism company said in a statement. "We are working on identifying the next flight opportunity."
Virgin Galactic's shares are up more than 450% since it went public in October 2019. The market valuation is now over $ 12 billion despite a lack of significant revenue and steady quarterly losses. The stock closed at $ 54.53 per share on Friday.
The bull case for Virgin Galactic investors depends on the company making progress in completing its development program and commencing commercial flights. This has resulted in updates and delays that significantly impact the daily fluctuations in the stock.
The stock rose 13% the previous day after the Federal Aviation Administration said the space flight test should start on Saturday. The company confirmed Thursday that it had "made good progress with our flight preparations," but added that the attempt was still ongoing.
A technical review can be done for a variety of reasons, including hardware review and software review. This means that a delay can range from days to weeks depending on the problem.
The now belated space flight test is a repeat of the attempt that was abandoned during a scheduled launch in December. Virgin Galactic spent two months analyzing the cause of the demolition and conducting soil tests. The test flight should review "Corrective Actions Completed".
While there will only be two pilots on board, the flight is expected to be the first of three as the company plans to complete development of its spacecraft system.
Earlier this week, UBS downgraded the stock to neutral, citing Virgin's earlier year earnings. UBS said in a notice to clients that "we are aware of a rating that appears full", although upcoming test flights form an appealing "catalyst chain".
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