AST SpaceMobile, Rocket Lab tumble following Blue Origin rocket explosion

Space stocks like AST SpaceMobile (ASTS) and Rocket Lab (RKLB) tumbled on Friday after Blue Origin's New Glenn rocket exploded on its launch pad at Cape Canaveral late Thursday night, hitting a sector that had been riding a big rally ahead of SpaceX's (SPAX.PVT) planned IPO.

AST SpaceMobile, the satellite-to-cellphone operator that has become a favorite of retail traders this year, was the hardest hit. The stock fell as much as 18% in early trading. Rocket Lab slid more than 6%, Planet Labs (PL) and Intuitive Machines (LUNR) each fell more than 5%, as did Voyager Technologies (VOYG). The Procure Space ETF (UFO), which tracks the broader industry, was on pace for its worst session of the year.

The losses came after Blue Origin’s reusable New Glenn rocket erupted in a massive explosion at its launchpad at Cape Canaveral. The explosion that followed was described as a routine hot-fire test of its seven BE-4 first-stage engines.

Space Force officials said all personnel were accounted for and that there were no injuries, but the pad itself, Blue Origin's only operational New Glenn site, sustained heavy damage.

"Very rough day, but we'll rebuild whatever needs rebuilding and get back to flying. It's worth it,” billionaire and Blue Origin founder Jeff Bezos wrote on X.

The New Glenn rocket had been slated to carry 48 Amazon Project Kuiper satellites into low Earth orbit, part of Amazon’s LEO effort to build a broadband constellation that competes with SpaceX's Starlink.

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The same rocket family is also central to NASA's Artemis program; Blue Origin holds a contract to deliver a lunar lander for a crewed mission scheduled for next year, and the agency awarded the company a permanent lunar base contract earlier this week.

Friday's slide arrives at an uneasy moment for the broader sector. Space stocks have been bid up aggressively over the past month, with the Procure Space ETF up 24% in the past five days and the UFO ETF higher by more than 100% over six months as investors position for SpaceX's initial public offering.

SpaceX filed its IPO prospectus last week and is targeting a mid-June listing on the Nasdaq under the ticker SPCX, with bankers marketing a valuation between $1.5 trillion and $2 trillion. The roadshow is expected to begin next week.

Pras Subramanian is Lead Transportation Reporter for Yahoo Finance. You can follow him on X and on Instagram.

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