SpaceX's Unlucky Flight 13 Fails to Launch Starship. Can the Stock Survive Yet Another Delay?

It was the most important day for Space Exploration Technologies Corp. (NASDAQ:SPCX) – commonly known as SpaceX – since its IPO: the 13th test launch of the Starship megarocket that forms the cornerstone of Elon Musk’s plans for continued space launch dominance.

But it ended with a whimper and not a bang.

As the countdown timer hit zero, after the engines had already ignited, the launch was scrubbed. That left the massive rocket – and SpaceX CEO Elon Musk’s grand ambitions – in limbo yet again.

Here’s why this delay could cause big headaches for Musk and for SpaceX investors.

Image source: Getty Images.

What happened

The Starship megarocket is a huge vessel, standing 407 feet tall, with its Super Heavy booster powered by 33 Raptor rockets, each capable of providing 50,000 pounds of force at liftoff.

Starship’s massive size gives it a vast cargo capacity of over 100 metric tonnes (220,000 pounds). By transporting larger payloads with a single launch, Starship promises to dramatically lower the cost per ton of flying things into space.

Flight 13 was scheduled to be the second test launch of Starship’s Version 3 (V3). Version 1 had six test flights in 2023-24, and Version 2 had five in 2025. The first V3 test, Flight 12, successfully launched on May 22 after a scrubbed attempt on May 21. During Flight 12, one of the launch rockets failed to ignite, and 13 of the 33 booster engines failed to relight mid-flight, resulting in loss of the booster.

As Flight 13’s countdown timer hit zero on Thursday evening, at least four of Starship’s Raptor engines failed to ignite. The company is replacing two of them and has said it will try again on Monday evening. The ship has remained on the launch pad with its propellant removed.

If at first you don’t succeed...

With his other company, Tesla (NASDAQ:TSLA), Musk frequently made promises and set deadlines for product launches, only to miss them repeatedly, sometimes by years. Tesla investors gave him the benefit of the doubt, and the company eventually grew to dominate the electric vehicle market.

The SpaceX investors who eagerly snapped up shares on the company’s IPO date in June would likely be willing to extend Musk the same leeway... but this time, there’s a literal race against the clock, and a deep-pocketed competitor nipping at SpaceX’s heels.

That competitor is Blue Origin, the private company founded by Amazon (NASDAQ:AMZN) founder Jeff Bezos. While it was initially focused on space tourism, Blue Origin has begun flying missions for NASA. It’s put its space tourism flights on hold to focus its resources on its lunar lander vehicle, which is expected to debut later this year.

A true space race

The Trump Administration has been eager to send astronauts back to the moon and has set a 2028 goal for a manned lunar mission, dubbed Artemis IV. That would leapfrog China, which plans to land its taikonauts on the moon by 2030.

In April, NASA’s Artemis II mission performed a successful lunar flyby, but the agency doesn’t yet have a viable vehicle to land a crew on the lunar surface. SpaceX’s Starship was originally tapped for that role, but last year, NASA announced it would use Blue Origin’s lander if it were ready first.

That means that SpaceX has just two years to demonstrate to NASA’s satisfaction that it can make it to the moon, land there, take off again, and get back to Earth, all while supporting a four-person crew. But as of right now, Starship hasn’t even managed to make it into a stable orbit around Earth.

Image source: Getty Images.

What it means for investors

SpaceX’s stock is down 38% from its all-time high, and is down more than 8% since the day before the scrubbed launch. A successful retry of Flight 13 will likely stop the bleeding, at least temporarily.

But even if Flight 13 is an unmitigated success, there will need to be a Flight 14, and a Flight 15, and more tests of ever-increasing complexity. The odds that something goes wrong on at least one are high. The amount of cash required for further development is also high.

As SpaceX continues to iterate using its rapid prototyping and “test as you fly” philosophy, investors should brace for explosive volatility both in their portfolios and on the launch pad.

John Bromels has positions in Amazon and Tesla. The Motley Fool has positions in and recommends Amazon and Tesla. The Motley Fool has a disclosure policy.