Just when Rocket Lab seemed like the most reliable launch provider in the U.S. behind SpaceX, they suffered a launch failure on September 18th, ending a success streak of 19 launches over an almost 2.5 year span. Rocket Lab’s stock (RKLB) took an immediate hit, dropping as low as $3.65 in post-market trading but has settled around $4.55 as of midday Friday, a ~10% drop from the close of $5.04 prior to the failure. Given Rocket Lab’s relatively impressive track record though, this highlights the skittishness public investors have with publicly traded space companies. To make matters worse, investor uneasiness was already mounting after Peter Beck (CEO) sold 3.6M of his 54.5M shares for $22M just one week earlier to fund his estate planning and charities.
With SpaceX dominating the launch industry, investors may have forgotten that even mature rocket designs still experience the occasional mishap. As seen in the figure below, Rocket Lab was actually slightly bucking the historical failure trend until this latest failure. If anything, what this failure calls into question the most is their ability to increase their launch cadence while phasing in reusability and manufacturing improvements. For comparison, Rocket Lab’s nearest competitors, Virgin Orbit and Astra Space, never established any significant reliability with their rockets. Their latest launch failures resulted in Virgin Orbit going bankrupt while Astra scrapped their Rocket 3 for Rocket 4 (still in development), which may never get the chance to fly based on Astra’s current financials.
Rocket Lab’s launch failure likely won’t lead to their demise but it does open the door for other launch providers to catch up while Rocket Lab investigates the failure. Firefly Aerospace just successfully demonstrated tactically responsive space access with their Victus Nox mission and seems poised to capitalize on that success. ABL is working towards another test launch to prove they are ready for commercial operations. Stoke Aerospace recently conducted a hop test with their second stage rocket and even more companies continue to advance the development of their launch systems.
In the race of small-medium launch providers, Rocket Lab’s position at the top is likely still secure. They may have stalled out for a brief period, but the dust cloud of approaching competitors is getting bigger in their rear view mirror. They’ll need to reestablish their launch consistency quickly to maintain their market position.
