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: Virgin Galactic announces another delay, and the stock is plunging

Virgin Galactic Inc. pushed back its next test flight and the start of its space-tourism business Thursday, and shares fell hard in late trading.

Virgin Galactic
SPCE,
+0.50%

disclosed in an announcement that commercial space flights would not begin until late 2022, after the company found a potential issue with some materials. After its first manned test flight earlier this year, the company had planned for one more test flight followed by an “enhancement program” meant to test and improve its vehicles, but it will now move into that program and push the next test flight into next year.

“Virgin Galactic has been performing routine tests and analyses to update its material properties database,” the company stated in a news release. “One of these recent laboratory-based tests flagged a possible reduction in the strength margins of certain materials used to modify specific joints, and this requires further physical inspection.”

Virgin Galactic stock fell more than 12% in after-hours trading, after closing with a 0.5% gain at $24.06. Shares have struggled since August, falling 27.3% in the past three months as the S&P 500 index
SPX,
+1.71%

declined 0.2%.

Virgin Galactic was grounded in August, as the Federal Aviation Administration investigated the company’s test flight with founder Richard Branson on board, which flew out of its protected airspace. The FAA cleared the company to start flying again in late September, which was expected to lead to the Unity 23 test flight sometime this month.

That test flight had already been delayed due to concerns about a potentially faulty part, concerns that Virgin Galactic said Thursday had been resolved. Still, the Unity 23 test flight is now unlikely to take place before mid-2022, pushing the planned launch of commercial space flights into the fourth quarter of 2022.

“The re-sequencing of our enhancement period and the Unity 23 flight underscores our safety-first procedures, provides the most efficient path to commercial service, and is the right approach for our business and our customers,” Chief Executive Michael Colglazier said in a statement Thursday.

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