Rocket Lab USA's latest mission failure on Monday has led to a significant setback for the company, resulting in a sharp drop in its stock price. The mission, launched from Rocket Lab's complex in New Zealand, aimed to send an Earth-imaging satellite into orbit for Capella Space. However, the mission failed nearly three minutes into the flight due to an issue with the second-stage rocket after the first-stage separation.
Following this unsuccessful attempt, Rocket Lab's stock fell about 22% in premarket trading on Tuesday, down to $3.94 per share. This decline is in stark contrast to the S&P 500 and Nasdaq Composite futures, which were up around 0.1%. Before Tuesday's trading, Rocket Lab shares had seen an increase of about 34% since the beginning of the year.
Prior to this setback, Rocket Lab had a commendable track record of delivering 171 satellites through 37 successful missions since it began commercial launches in 2018. The company had completed nine launches in 2022 and eight in 2023. In comparison, United Launch Alliance (ULA), a joint venture between Boeing (NYSE:BA) and Lockheed Martin (NYSE:LMT), has completed approximately 150 successful missions since its inception in 2006, including eight launches in 2022 and two so far in 2023.
Despite these achievements, no commercial space firm has managed to surpass SpaceX. Elon Musk's company has conducted over 260 launches, including more than 60 thus far in 2023.
The recent failure is expected to impact Rocket Lab's short-term stock performance and delay upcoming missions, leading to reduced sales for 2023. Wall Street previously predicted third-quarter sales of around $77 million and fourth-quarter sales of $98 million. Sales for 2024 were projected to reach approximately $430 million, a significant increase from the estimated $291 million for 2023.
These figures, however, will need to be adjusted as Rocket Lab addresses the issues that caused the mission's failure. This situation introduces a degree of uncertainty for investors, a factor often unwelcome in a business sector that demands high levels of certainty.
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