Virgin Galactic Stock Tumbles Following Flight Delay – Is It Still Worth Buying?

Virgin Galactic

Virgin Galactic announced it was delaying its first commercial research space mission — the Unity 23 test flight — after a third-party supplier recently flagged a potential defect in a component of the flight control system. Virgin Galactic shares tumbled this morning following the announcement.

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It is not yet known whether the defect is present in the company’s vehicles and what, if any, repair work may be needed, the company said in a statement.

“Out of an abundance of caution, and in line with Virgin Galactic’s established safety procedures, the Company is in the process of conducting inspections in partnership with the vendor,” according to the statement.

At this point, the earliest Virgin Galactic expects to open its flight window for Unity 23 is mid-October, and a further update and specific flight window will be shared once the inspection is complete, in coordination with the Italian Air Force, it said in the statement.

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“We have a robust pre-flight readiness approach that is rooted in our thorough, proactive and safety-first culture,” Michael Colglazier, CEO of Virgin Galactic, said in the statement. “There is nothing more important to us than the integrity of our vehicles. Our test flight processes and procedures are rigorous and structured to identify and resolve these types of issues. We look forward to taking to the skies again soon.” 

This issue is unrelated to the Unity 22 flight or the current FAA matter, which is focused on air traffic control clearance and communications, the company added.

The stock has gained more than 6% so far in 2021 and 44% over the past year, according to Barron’s.

On July 11, Virgin Galactic completed the 22nd test flight of VSS Unity, the first test flight with a full crew in the cabin, including the company’s founder, Richard Branson.

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About the Author

Yaël Bizouati-Kennedy is a former full-time financial journalist and has written for several publications, including Dow Jones, The Financial Times Group, Bloomberg and Business Insider. She also worked as a vice president/senior content writer for major NYC-based financial companies, including New York Life and MSCI. Yaël is now freelancing and most recently, she co-authored  the book “Blockchain for Medical Research: Accelerating Trust in Healthcare,” with Dr. Sean Manion. (CRC Press, April 2020) She holds two master’s degrees, including one in Journalism from New York University and one in Russian Studies from Université Toulouse-Jean Jaurès, France.

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