Here's Why The Rocket Lab, Planet Lab, Virgin Galactic Stocks Are Falling Ahead Of SpaceX IPO
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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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