Virgin Galactic Craters 24%, Rocket Lab Drops 8%, AST SpaceMobile Falls 10% as SpaceX Hype Triggers a Space-Stock Shakeout
Virgin Galactic, Rocket Lab, and AST SpaceMobile stocks dropped 24%, 8%, and 10% respectively on Friday as SpaceX’s long-awaited public debut triggered sector-wide selling. The selloff contrasts with recent gains for these companies, with Virgin Galactic up 79% year-to-date and Rocket Lab up 65%, as investors rotate into SpaceX ahead of its trading launch.
Shares of Virgin Galactic, Rocket Lab, and AST SpaceMobile fell sharply on Friday, dropping 24%, 8%, and 10% respectively, as SpaceX’s highly anticipated public debut prompted investors to rotate out of competing space stocks. Virgin Galactic’s stock, which had surged 79% year-to-date to $5.73, plummeted amid speculation over whether it could benefit indirectly from SpaceX’s listing. Retail traders on WallStreetBets debated its potential as a "sympathy play," but the stock’s fundamentals remain weak, with Q1 2026 revenue of just $227,000 and negative free cash flow guidance for Q2 2026. Rocket Lab, which had gained 65% year-to-date, also declined despite its inclusion in the NASDAQ 100 and strong financials. The company reported record Q1 2026 revenue of $200.35 million, a 64% year-over-year increase, and a backlog of $2.2 billion. However, investors questioned whether its stock would continue attracting sector inflows or face further selling pressure after SpaceX’s debut. AST SpaceMobile’s stock dropped 10% to $88, reversing earlier gains of 21% in 2026. The company is viewed as a key player in direct-to-device satellite broadband, but traders appear to have front-run SpaceX’s IPO, leading to profit-taking. SpaceX’s competitive edge—highlighted in its filing—includes $620 million in revenue growth for Launch Services in 2024, with Falcon launches rising from 96 in 2023 to 134 in 2024. Starlink deployments also increased from 63 to 89 launches in the same period, reinforcing its dominance in the sector. The selloff reflects broader market adjustments as investors reassess valuations in light of SpaceX’s public entry, with publicly traded space stocks facing downward pressure.
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