What happened

Space tourism pioneer Virgin Galactic's (NYSE:SPCE) stock closed Friday down another 4%, after falling nearly twice that on Thursday.

Yesterday, if you recall, Virgin Galactic struggled to overcome the weight of a pair of negative news items. A curiously worded employment status update from the company's now-former flight test director Mark Stucky advised future employers that he is no longer working with Virgin Galactic, and that he did not leave "on [his] own timeline."

This came just one day after Virgin Galactic's rival in space tourism, Blue Origin, got a bit of a backhanded compliment from one of its four inaugural space tourist customers, when Wally Funk returned from her first trip to space and commented:

  • "There was not quite enough room" on the spaceship.
  • "I just wish [the ride] had been longer."
  • Oh, and "we weren't quite high enough ... to see the world."
Virgin Galactic SpaceShip2 rocketing near vertically.

Image source: Virgin Galactic.

So what

Doh! Those are not the kinds of comments you want to see on your Yelp review!

Granted, those comments were directed at Blue Origin, and not Virgin Galactic. But given the similar size of the two spacecraft, and the fact that Virgin Galactic's spaceplane actually doesn't even go up as high as Blue Origin's, one has to wonder if Virgin Galactic's customers will be similarly underwhelmed by the experience.

Now what

This brings us to today's bad news, and adding injury to insult, we learned today that there are more challenges in the works for Virgin Galactic. Firstly, the Federal Aviation Administration has just given notice that merely flying to the edge of space as a passenger on a space tourism vessel will not qualify someone to call herself or himself an "astronaut" -- not in the FAA's opinion at least. Rather, to be an astronaut in the government's opinion, one must perform "activities during flight that were essential to public safety, or contributed to human space flight safety."  

Just occupying a seat doesn't cut it.

Taking away one of the perks of space tourism, the FAA has almost certainly complicated Virgin Galactic's marketing efforts going forward. Further pinching Virgin Galactic -- and furthermore, directly threatening the company's ability to grow its profits -- we learned today that Rep. Earl Blumenauer of Oregon is planning to introduce legislation that will specifically tax the sale of space tourism tickets.  

By raising the price of a space tourism ticket, Blumenauer's bill would almost certainly lower demand for the service. (That's just Economics 101.) Whether the bill becomes law, however, and if so, just how big of an effect it will have on demand, remains to be seen.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.