What happened
Over the weekend, investors got a fresh reminder that space is hard. The lesson is weighing on shares of a number of space stocks on Monday, sending shares of Virgin Galactic Holdings (SPCE +2.20%) down nearly 5%.
So what
Virgin Galactic tends to be a turbulent stock on even quiet market days, caught between the promise of space and the harsh reality that it is early days for space-based industries and there remains a lot of risk.
Virgin Galactic's crew for its historic first passenger flight. Image source: Virgin Galactic.
The risk was top of mind on Monday after Astra Space (ASTR +0.00%) was dealt a setback over the weekend. Astra's test launch of its satellite-carrying rocket didn't go to plan. One of the rocket's five main engines shut down just after launch, causing it to fail to reach orbit as intended.
The news caused Astra shares to plummet on Monday. Although there is no business connection between Astra and Virgin Galactic, investors appear to be reassessing their desire to hold risky space businesses following the setback.
Now what
Virgin Galactic has its own issues absent Astra's difficulties. The space tourism company hit a key milestone when it successfully took founder Richard Branson into space, but now it has to prove it can repeat the feat on a regular basis and establish there is enough of a market for the $400,000-plus ticket to make the venture a commercial success.
The stock nearly doubled in the first half of 2021, but has given back most of those gainssince the start of July. Investors appear to have taken a wait-and-see approach to Virgin Galactic since Branson's historic flight. And the news from Astra from the weekend is, if nothing else, a fresh reminder that patience is necessary when dealing with space stocks.
