Good news became bad news for Rocket Lab USA (RKLB 3.29%) on Friday after the company announced its successful return to launch operations for the first time since a mishap resulted in the destruction of an Electron rocket in September -- and the stock promptly fell.
As of 2:50 p.m. ET, Rocket Lab stock is down 9.6%.
What happened to Rocket Lab's rocket?
This is...a bit strange, to say the least, because, by all accounts, Rocket Lab's launch went swimmingly. Launching out of New Zealand this morning, a Rocket Lab Electron rocket successfully deployed an Earth-imaging satellite for its customer, Japan's Institute for Q-shu Pioneers of Space, Inc. (iQPS).
This success means Rocket Lab has now launched more rockets (10) in 2023 than in any previous year and remains America's No. 2 space company by number of rockets launched annually -- for the fifth straight year, as the company pointed out.
Are investors right to be upset?
So, what's wrong with any of this? Honestly, I'm at a loss to find a connection between what Rocket Lab said and how investors are reacting to it.
On the other hand, earlier this week, Rocket Lab stock did go on something of a run in the run-up to today's launch. Perhaps caught up in general market enthusiasm over the Fed's announcement that it won't raise interest rates again this year and might even cut them a bit next year, Rocket Lab stock was at one point up nearly 8% from last week's close...before giving that all back today.
Perhaps that exuberance was a bit irrational, and maybe Rocket Lab did deserve to give a bit of it back today after the initial rate-news excitement passed. Even so, the company has just proven it correctly identified the issue with its last rocket, fixed it, and is back in business today.
I call that good news -- and not a good reason to sell Rocket Lab stock today.
