Virgin Galactic, Astra Space: Space flight stocks soar high

Virgin Galactic (SPCE) shares jumped after the company announced plans to pause space flights in 2024 to focus on developing its next generation of aircrafts. The move comes as Virgin Galactic laid off 18% of staff to "cut costs and realign resources."

Meanwhile, space startup Astra Space (ASTR) received a $30 million offer to go private again, just over a year after its IPO. Astra has struggled with failed launches that have weighed on it's stock since going public.

Yahoo Finance's Ines Ferre joins Jared Blikre to break down the latest details.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Video Transcript

JARED BLIKRE: Virgin Galactic plans to pause spaceflight operations next year to focus on its next generation of space travel. The company also laying off roughly 18% of its workforce to decrease costs and realign its resources. The cuts are projected to save the company roughly $25 million annually.

With six successful spaceflights completed this year, the company significantly trimmed its net losses during the most recent quarter and doubled revenue. With more on the company's path forward is Yahoo Finance's Ines Ferre. So, Virgin Galactic on pause.

INES FERRE: Yeah, Jared--

JARED BLIKRE: The Fed's on pause. I'm sorry, go ahead.

INES FERRE: Yeah, no. Look, you're right. I mean, look, we are in a high interest rate environment, and we are seeing space related companies that are cutting costs. And in this case, Virgin Galactic, which we have followed this stock really since they went public via SPAC back in 2019, and so much enthusiasm about this stock really and the future of space travel.

And we have seen also short sellers pounding on to this stock. So part of what you are seeing today, that huge spike that you are seeing in that stock price, is likely a short squeeze as you are watching the stock up 27%. But look, the Street is positive about its revenue guidance for the fourth quarter. That revenue that's expected to come in at $3 million. Prior to that, the target was $1 million.

And estimates from analysts was for $1.5 million. The loss per share was less than expected for the third quarter. And Virgin Galactic is going to be pausing its flights in mid-2024 for the Unity spacecraft. And this is an important point because the company is now shifting towards its Delta spacecraft-- that's its newer spacecraft-- which will be able to hold 50% more passengers and travel twice a week, and help the company reach profitability at a faster pace. Jared.

JARED BLIKRE: All right. We've got to take another name here in the space realm. And that's rocket launching space grabbing-- excuse me, this is Astra Space. Astra Space is a company that went public via SPAC merger back in 2021. But a string of failed launch failures have dragged on the stock since. Now its founders, they may have a new plan to go private. What are the details here?

INES FERRE: Yeah, that's right. Its founders are now saying that they are offering to take the company private by buying the outstanding shares at $1.50 per share. Now you'll see that the stock price is right now at around $1.20 something per share. Keep in mind that this stock was at $185 a share back in 2021. The company went public via SPAC in 2021. I would say that that was the height of the space-related companies.

But as you had mentioned, it's struggling to obtain cash. And look, in this higher interest rate environment, we are going to see this. These space related companies are very capital-intensive. These projects require a lot of money, a lot of tests. A lot of challenges going forward. Jared.

JARED BLIKRE: Yeah. Astra Space down about 99 and change, 99% and change. Thank you for that, Yahoo Finance's Ines Ferre.