Here's Why The Rocket Lab, Planet Lab, Virgin Galactic Stocks Are Falling Ahead Of SpaceX IPO
Top space stocks, which surged in recent months on anticipation of the SpaceX IPO, have suffered a sharp reversal in recent days, wiping out billions of dollars in market value.
Top Space Stocks Have Plunged This Month
Rocket Lab (NASDAQ:RKLB) stock has dropped by 27% from its highest point this year, and is trading at its lowest point since May 11. Its market capitalization has dropped from $87.2 billion to $63 billion.
Planet Lab (NYSE:PL) stock retreated to $32 from this month's high of $51, with its valuation falling from $18.40 billion to $11.50 billion. This retreat accelerated after the company published its financial results last week.
Its number showed that its revenue rose by 42% to $94.2 million, while its adjusted EBITDA was a loss of $1 million. At the same time, its backlog jumped by 72% YoY to $906 million.
The management expects that its second-quarter revenue will be between $102 million and $107 million, with its capital expenditure coming in between $21 million and $27 million.
Virgin Galactic (NASDAQ:SPCE) stock retreated to $4.38, down by 52% from its highest point this month. Also, its market capitalization dropped from $750 million to $440 million.
Other space stocks like AST SpaceMobile (NASDAQ:ASTS), Intuitive Machines (NASDAQ:LUNR), Firefly Aerospace (NASDAQ:FLY), and ViaSat (NASDAQ:VSAT) have also plunged by double digits from the year-to-date high.
Space Stocks are Falling Amid Profit-Taking Amid the SpaceX IPO
The ongoing space stocks crash is occurring ahead of the highly anticipated SpaceX IPO, which is expected this week. SpaceX is seeking to raise $75 billion at a valuation of $1.78 trillion. However, recent reports suggest that demand for the offering is exceptionally strong, with investor orders reportedly exceeding $150 billion.
The retreat is mostly because of profit-taking among investors after most of them soared by triple-digits in the past few months. For example, at its peak, Rocket Lab stock was up by about 500% above its lowest point last year. Similarly, Planet Labs was up by 940% from last year's lowest point, while Intuitive Machines rose by over 470%.
The pullback is also occurring as investors anticipate a classic "buy the rumor, sell the news" scenario. This refers to a situation where investors accumulate an asset ahead of a major event and then sell it once the event materializes. In this case, investors previously bought space stocks and are now taking profits in anticipation of the SpaceX IPO.
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