What happened

Virgin Galactic Holdings (SPCE -5.47%) is already more than two years behind its original schedule for launching commercial service. In the first half of 2022, investors learned of a new setback that would delay things further.

In a market that was unkind to speculative stocks in general, the Virgin Galactic news was not well received. Shares of the Richard Branson-backed space start-up fell 55% in the first six months of 2022, according to data provided by S&P Global Market Intelligence.

So what

Virgin Galactic captured the imagination from the beginning, promising to launch a new era in space exploration by ferrying tourists into the outer atmosphere for a brief period of weightlessness. The company was also one of the first in a wave of start-ups to go public via a special purpose acquisition company (SPAC) when it hit the New York Stock Exchange in October 2019.

Those initial dreams have given way to the reality that space is hard. The company had originally hoped to begin scheduled service in 2020 ahead of Branson's 70th birthday, but went into 2022 hoping to have commercial operations off the ground by the end of the year.

In May, Virgin Galactic pushed that timeline into 2023, blaming supply chain and labor issues. The company also faces shareholder complaints that management has misled investors, part of litigation against one-time chairman Chamath Palihapitiya relating to the investor's 2021 stock sale.

Now what

Virgin Galactic continues to work toward starting service, but given the complexities of space and the company's continued issues, investors have every reason at this point not to give the company the benefit of the doubt. The truth is that Virgin Galactic might never launch commercial service, or by the time it does rivals including Jeff Bezos' Blue Origin will have soaked up most of the demand for high-cost tickets into space.

Virgin Galactic's challenge is to both get its service up and running, and prove that it can be run profitably. The company can still reach its destination, but after a rough ride so far investors now appear content to watch this adventure play out from the sidelines.