Rocket Lab Shares Drop After First Launch Failure in Over Two Years
Rocket Lab, a prominent aerospace company, experienced a significant setback as its stock price plummeted following its first launch failure in over two years. The incident occurred during the company's 41st Electron rocket launch, which aimed to carry the Acadia 2 satellite for Capella Space, based in San Francisco. Unfortunately, the launch failed approximately two minutes and 30 seconds after liftoff, prompting Rocket Lab to collaborate with the Federal Aviation Administration (FAA) to investigate the root cause.
In a statement, Rocket Lab expressed deep regret to its partner Capella Space for the mission's loss. As a consequence of this failure, Rocket Lab's shares saw a decline of approximately 7.5% in trading, closing at $4.66 per share. Despite this setback, the company had seen a year-to-date increase of nearly 24% in its stock value.
Rocket Lab had plans to conduct its 42nd Electron mission before the end of the third quarter, but due to the launch failure, it announced a postponement until the issue is resolved. This delay will also necessitate the issuance of revised third-quarter revenue guidance. In its second-quarter report, Rocket Lab had previously forecasted approximately $30 million in launch services revenue, a minority portion of its overall revenue projection, which ranged between $73 million and $77 million. The bulk of its anticipated revenue was expected to come from its space systems unit.
The recent failure marks a significant deviation from Rocket Lab's track record, as the Electron rocket had not experienced a mission failure since May 2021. Over the past 28 months, the company had successfully completed 19 launches, establishing itself as the second-most active U.S. rocket company, trailing only behind Elon Musk's SpaceX.
The timeline for resolving the issue and relaunching a rocket remains uncertain, with investigations contingent on the severity and complexity of the problem. After a previous launch failure, Rocket Lab managed to launch its subsequent Electron mission 70 days later.