Why Virgin Galactic Stock Is Down By 7% Today

Virgin Galactic Stock Falls As FAA Does Not Allow SpaceShipTwo To Fly Until Investigation Report Is Approved

Shares of Virgin Galactic found themselves under pressure after U.S. Federal Aviation Administration (FAA) did not allow SpaceShipTwo to fly until it approved the final mishap investigation report. FAA is investigating the deviation from the course during the decent of Virgin Galactic’s flight which carried Richard Branson into space back in July.

This is a material setback for the company as Virgin Galactic planned to launch its first commercial research mission with Italian Air Force crew members onboard in late September or early October 2021. This mission would not be possible until FAA approves the investigation report.

What’s Next For Virgin Galactic Stock?

Virgin Galactic stock has been under pressure since late June when it made an attempt to settle above the $57 level. Currently, the stock is trying to move below the $24 level, so Virgin Galactic lost more than half of its market capitalization in just several months.

Analysts expect that Virgin Galactic will report a loss of $1.5 per share in 2021 and a loss of $0.96 per share in 2022. Analyst estimates have been moving lower in recent weeks, and they may be lowered after the new developments.

It is not clear how much time would be needed to complete the investigation report and when FAA will allow Virgin Galactic to fly again, but this delay will surely serve as a negative catalyst for the company’s stock.

It remains to be seen whether the recent pullback will attract speculative traders as the stock may lack upside catalysts for some time until the company is allowed to fly again. It should be noted that big price swings are usual for Virgin Galactic stock, so traders should be prepared to deal with volatility in case they choose to bet on the company’s shares after the pullback.

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