Virgin Galactic shares plunge after Branson flight delayed

Virgin Galactic's Richard Branson gathers with Virgin Galactic employees in front of the new SpaceShip Two VSS Unity after a roll-out ceremony. Photo / Getty Images

Virgin Galactic Holdings sank after the company said its next test flight as well as founder Richard Branson's trip into space had been delayed.

Shares in the company dropped 14pc to $36.50 before the start of regular trading Friday in New York, setting the stock up for its sharpest decline since mid-December.

The company said its next test flight had been delayed by three months, to May.

The delay means the plan to carry billionaire Richard Branson into space on a separate test flight in the first quarter will also be pushed back. His trip will likely be moved to the summer.

In a conference call, President Mike Moses said electromagnetic interference problems caused a computer problem in December, when the rocket's engine failed to ignite during a test flight.

Virgin Galactic replaced the flight-system computers but then discovered more electromagnetic interference issues during preparations for a flight due to take place on February 13. Those problems will take until May to correct, said Moses.

"Investors looking for a shorter runway for profitability or even commercialisation of their space tourism business have been disappointed," said Andrew Chanin, co-founder and CEO of ProcureAM, which runs a space ETF that holds Virgin Galactic shares.