What happened
By all accounts, Thursday should have been a huge day for Virgin Galactic (SPCE 3.15%) -- but it's not working out that way at all, and as of 1:20 p.m. ET, shares of the space tourism pioneer are in freefall, down 11.8%.
This is a pretty huge surprise, given that after years of trying, Virgin Galactic finally got its first commercial, revenue-generating spaceflight mission off the ground, launching its Galactic 01 mission carrying three Italian Air Force pilots to the edge of space, and then bringing them back safely on Earth.
Image source: Virgin Galactic.
So what
The surprise gets even bigger with Virgin Galactic confirming it's ready to roll right into its next revenue-generating mission -- Galactic 02 -- which will launch in August. And the company further confirmed plans to begin launching space tourism flights monthly thereafter.
By the time 2023 draws to a close, therefore, Virgin Galactic could conceivably have flown six revenue-generating missions, tying archrival Blue Origin's record for six crewed suborbital flights. Blue Origin's New Shepard space tourism rockets, by the way, have been grounded since an unmanned version of the spacecraft suffered an "anomaly" and a crash in September 2022.
Now what
You'd expect this news to elicit applause from Virgin Galactic shareholders, but today it's having the opposite effect.
Why is that? This is probably an example of "buying the rumor, selling the news" among investors, who bid up Virgin Galactic shares sharply earlier this month, and are now trying to cash out (what's left of) their winnings on today's good news.
It's worth noting, however, that even if Virgin Galactic succeeds in flying six times this year, its total revenue from these flights probably won't exceed $9 million in total -- while its operating costs this year could easily exceed $500 million. This implies a 2023 fiscal year loss of $491 million or more.
Once the size of that loss becomes apparent, investors may decide they have a lot less to cheer about.
