What happened
Space tourism pioneer Virgin Galactic (SPCE 2.39%) launched its third successful commercial spaceflight on Friday and its fourth successful flight in the past four months. Space fans cheered and...like clockwork, Virgin Galactic's stock went down 3% (through 12:45 p.m. ET) just as it has fallen in six of the last seven trading sessions.
Now investors want to know: What exactly is up with Virgin Galactic and its incredible shrinking stock price?
NYSE: SPCE
Key Data Points
So what
After all, you couldn't ask for a prettier press release than the one Virgin Galactic issued this afternoon. The flight carried two pilots, an "astronaut instructor," and three paying passengers, each of whom presumably anted up in the neighborhood of $250,000 for their tickets years ago when Virgin Galactic first started preselling reservations.
As the company described it, everything went swimmingly with the flight, from takeoff at 10:34 a.m. ET to release of the VSS Unity spaceplane from its VMS Eve mothership at just under 45,000 feet altitude, to Unity cresting its apogee at 55 miles above Earth's surface and back to a successful landing at 11:36 a.m.
And already, Virgin Galactic is preparing for its next spaceflight, "Galactic 04," scheduled to take place in October. Thus, Virgin Galactic is maintaining its promised schedule of one flight per month since starting regular operations.
Now what
But here's the thing: Virgin Galactic is spending $125 million a quarter on operating costs -- more than $40 million a month. At $250,000 a ticket, it needs to fly about 167 passengers per month to offset those costs and maybe break even on its costs.
With a spaceplane rated to carry only six passengers per flight and flying only once a month, that would already seem an impossible task. But today we learned that Unity is still only flying three passengers per flight and giving up one of its few available seats to an "astronaut instructor" who didn't buy a ticket!
Simply put, these mathematics seem calculated to ensure that Virgin Galactic makes no profit and keeps losing money. While analysts still hope to see Virgin Galactic turn profitable one day, today is not that day.
