Why Rocket Lab Stock Plummeted Today
Key Points
Blue Origin's rocket explosion continued to weigh on space stocks early in this week's trading.
Space stocks are also showing signs of volatility connected to SpaceX's June 12 IPO.
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Rocket Lab (NASDAQ: RKLB) stock sank in Monday's trading. The space-tech company's share price ended the day's trading down 14.8%. Meanwhile, the S&P 500 was up 0.3%, and the Nasdaq Composite was up 0.6%.
While there wasn't any new business news for Rocket Lab today, the stock moved lower in response to two bearish catalysts. Investors are still responding to last week's Blue Origin rocket explosion, and there also appears to be some market jitters surrounding SpaceX's initial public offering (IPO).
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Space stocks continue to move lower after Blue Origin explosion
Jeff Bezos's Blue Origin suffered a rocket explosion on the launch pad last Friday, and the development has resulted in some pullbacks for space stocks. While the Blue Origin explosion doesn't have any direct business implications for Rocket Lab, it has highlighted risks that come with investing in the category. Rocketry and other space technologies are enormously complex and typically have very little margin for error, and failure states are often catastrophic.
SpaceX's IPO is creating some volatility
SpaceX is set to go public on June 12, raising funds by selling stock that will assign the company a valuation of at least $1.8 trillion. The IPO is set to be the largest in history, and excitement surrounding the company's public debut has helped generate bullish momentum for other space stocks. On the other hand, SpaceX's massive valuation is also raising concerns among some investors -- and market jitters surrounding the IPO seem to have played a role in Rocket Lab's pullback today.
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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Rocket Lab. The Motley Fool has a disclosure policy.
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