The explosion of Blue Origin’s rocket sent shares of AST SpaceMobile (ASTS) down by 15% on May 29. The repercussions of the test launch mattered greatly.
During a test fire of Blue Origin’s engines, an explosion damaged the launch pad. Engineers said that the wreck would take at least six months to repair. The delay dramatically shifts AST’s launch schedule for its satellites. Markets valued the stock based on the company having no delays of this magnitude.
The event sent shares of Echostar (SATS), Sidus Space (SIDU), ork Space Systems (YSS), MDA Space (MDA), Rocket Lab (RKLB), and Redwire (RDW) lower. Planet Lab (PL) stock fell to around $45 before recovering to close at $51.14.
The explosion also renews the market's focus on SpaceX’s initial public offering. Although SpaceX competes with Blue Origin, the firm is ahead technologically. SpaceX has a near-monopoly in the global orbital launch market. It also leads in the satellite internet space. Still, stock markets are assigning a steep premium on SpaceX’s IPO.
Investors looking to buy the IPO might consider the excess demand exceeding the supply. Once that dissipates in the coming days following the listing, SpaceX’s share price might fall considerably.
S&P 500 ETF holders will have no choice but to buy the IPO immediately. ETFs and index funds do not have the flexibility to wait for better prices, whereas individual investors do.
