What happened

Ever since Rocket Lab (RKLB 13.13%) founder Peter Beck promised in March that his company would design a new rocket that will be reusable (like the rockets built by SpaceX already are), investors have been waiting to see what the new "Neutron" rocket would look like. As anticipation built following that announcement, the price of the tiny space stock more than doubled at the all-time high it hit in September. For that matter, as late as the end of November, Rocket Lab was still up some 50% relative to where it was trading before the initial plans for the Neutron were first announced.

But then the big reveal came Thursday, and Rocket Lab stock sank sharply. After losing a total of 19% since Nov. 30, the stock was down a further 13.6% as of 2:45 p.m. ET Friday.

Artist's depiction of Neutron rocket first stage opening its fairing to release Neutron rocket second stage.

Image source: Rocket Lab.

So what

I think investors' reaction to Rocket Lab's big Neutron reveal can be summarized in just six words: "Buy the rumor, sell the news." Because from a long-term investor's perspective, there really wasn't anything in Rocket Lab's announcement Thursday to justify selling off the stock.  

Neutron will be an entirely new rocket design, says Rocket Lab, and designed to satisfy the world's launch needs through at least 2050. Built from tough carbon fiber, featuring an integrated fairing that doesn't need to be jettisoned to release a payload, and a novel design wherein the rocket's second stage is encapsulated within its first stage, this is truly a "space age" design like nothing else I've seen elsewhere in rocket-land.

Now what

So why are investors selling the stock? Simply put, because now that Neutron has been revealed, the catalyst has passed and there won't be anything really big to look forward to in the way of Rocket Lab PR for quite some time. (Or at least, nothing we know about).

For the next several quarters at least, Rocket Lab will presumably have little new to report other than a series of rocket launches, payload deployments, and -- hopefully -- a steady progression toward profitability. This week's excitement, however, is over -- and that is why the stock is going down.