Rocket Lab stock declines following Neutron rocket delay and regulatory challenges

Rocket Lab experienced its largest single-week stock decline since its 2021 public debut, with shares falling approximately 23% between October 12 and October 16. The sell-off was driven by two primary factors: the postponement of the first Neutron rocket launch to 2027 and regulatory scrutiny regarding its planned $8 billion acquisition of Iridium.

The delay of the Neutron rocket, which is intended to compete with SpaceX’s Falcon 9, was attributed to a defect in its carbon-composite tank. This marks a series of delays for the heavy-lift vehicle, which was originally slated for a 2024 debut.

Simultaneously, Ligado Networks has petitioned the Federal Communications Commission (FCC) to investigate Rocket Lab’s proposed takeover of satellite network operator Iridium. Ligado claims the acquisition could be anti-competitive. Despite these setbacks, Rocket Lab maintains a significant backlog of $2.36 billion, with the majority of its revenue currently derived from its Space Systems segment rather than launch services.