Rocket Lab stock plummets by 25% following first launch failure in over two years

Rocket Lab‘s stock declined during premarket trading after experiencing its first launch failure in over two years early Tuesday morning.

The company confirmed that its 41st Electron rocket launch, carrying the Acadia 2 satellite for San Francisco-based Capella Space, failed approximately 2 minutes and 30 seconds into the flight. Rocket Lab is currently collaborating with the Federal Aviation Administration to investigate the root cause of the issue, which occurred around the time of the rocket’s separation of its first and second stages.

“We deeply apologize to our partners at Capella Space for the mission loss,” Rocket Lab stated.

Shares of Rocket Lab dropped as much as 26% in premarket trading compared to its previous closing price of $5.04. As of Monday’s close, the stock had risen by 34% for the year.

Rocket Lab’s 42nd Electron mission, originally planned for launch before the end of the third quarter, will be delayed due to the resolution of the launch failure. Consequently, Rocket Lab anticipates issuing revised revenue guidance for the third quarter. In its second-quarter report, the company had projected launch services revenue of about $30 million, accounting for the minority of its overall revenue forecast of $73 million to $77 million, with the majority expected to come from its space systems unit.

This failure from Rocket Lab follows a consistent streak of successful launches, solidifying its position as the second-most active U.S. rocket company, trailing Elon Musk’s SpaceX. Since May 2021, the Electron rocket had not experienced any mission failures, achieving 19 successful launches in 28 months.

Investigations into a rocket failure can take an indefinite amount of time, with the duration dependent on the severity and complexity of the problem. Following their previous launch failure, Rocket Lab launched its next Electron mission 70 days later.