Shares of Rocket Lab USA (NASDAQ: RKLB) tumbled by 26% on Tuesday, following an unforeseen setback in the company’s latest mission. The Lunar Orbiter mission, which carried satellites for American space tech firm Capella Space, met an unexpected end approximately 2-1/2 minutes after liftoff due to an undisclosed issue.
Capella Space, the recipient of the payload, has not yet provided a statement on the matter.
Last week, Rocket Lab disclosed a significant deal with defense contractor Leidos, securing four launches slated for 2024 and 2025. However, in light of this mission’s failure, the company anticipates a reassessment of its third quarter revenue projections. Additionally, Rocket Lab has decided to postpone its next mission, originally scheduled for before the close of the third quarter. The company has affirmed its close collaboration with the Federal Aviation Administration (FAA) and other relevant agencies as they embark on an investigation to determine the underlying cause.
The ramifications of this mission failure are extensive, weighing heavily on rocket companies that furnish payloads for space exploration startups. This is reminiscent of Virgin Orbit, helmed by Richard Branson, which declared bankruptcy in April following a failed orbit attempt in January.
Shares of Rocket Lab have experienced a staggering 60% decline since the conclusion of 2020, a period marked by a contraction in space investments. As of Monday’s market closure, the company’s market capitalization was reported at $2.44 billion.
The repercussions of this incident are likely to reverberate throughout the space industry. Investors are now searching for signs of a brighter future for rocket companies, with the investigation into the root cause of this mission failure becoming a pivotal factor.
Many stakeholders are closely watching to discern if Rocket Lab will be able to rebound from this setback and reclaim its standing as a trusted player in the space exploration sector. The question lingers whether the mission failure and its resultant stock nosedive were too substantial a blow for the company to recover from.
As the investigation unfolds, the industry will await with bated breath to see how Rocket Lab navigates this challenging juncture and if it can reestablish itself as a reliable force in the space exploration landscape.